Bill Text: IL HB1197 | 2023-2024 | 103rd General Assembly | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Solicitation for Charity Act. Defines "reviewed financial statements". Provides that every charitable organization that receives in any 12-month period ending upon its established fiscal or calendar year contributions in excess of $500,000 (rather than $300,000) shall file a written report meeting specified criteria with the Attorney General. Provides that a charitable organization that receives in excess of $300,000, but not in excess of $500,000, shall file a written report meeting other specified criteria with the Attorney General upon forms prescribed by the Attorney General. Provides that the Attorney General, within a binding nonjudicial settlement agreement, may accept a written assurance of discontinuance of any method, act, or practice alleged to be a violation of the reporting requirements from the person who has engaged in the method, act, or practice. Provides that the changes made by the amendatory Act are inoperative on and after January 1, 2029. Effective January 1, 2024.

Spectrum: Slight Partisan Bill (Democrat 11-5)

Status: (Passed) 2023-06-30 - Public Act . . . . . . . . . 103-0121 [HB1197 Detail]

Download: Illinois-2023-HB1197-Enrolled.html

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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Solicitation for Charity Act is amended by
changing Sections 1 and 4 as follows:
(225 ILCS 460/1) (from Ch. 23, par. 5101)
Sec. 1. Definitions. The following words and phrases as
used in this Act shall have the following meanings unless a
different meaning is required by the context.
(a) "Charitable organization" means any benevolent,
philanthropic, patriotic, or eleemosynary person or one
purporting to be such which solicits and collects funds for
charitable purposes and includes each local, county, or area
division within this State of such charitable organization,
provided such local, county, or area division has authority
and discretion to disburse funds or property otherwise than by
transfer to any parent organization.
(b) "Contribution" means the promise or grant of any money
or property of any kind or value, including the promise to pay,
except payments by union members of an organization. Reference
to the dollar amount of "contributions" in this Act means in
the case of promises to pay, or payments for merchandise or
rights of any other description, the value of the total amount

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promised to be paid or paid for such merchandise or rights and
not merely that portion of the purchase price to be applied to
a charitable purpose. Contribution shall not include the
proceeds from the sale of admission tickets by any
not-for-profit music or dramatic arts organization which
establishes, by such proof as the Attorney General may
require, that it has received an exemption under Section
501(c)(3) of the Internal Revenue Code and which is organized
and operated for the presentation of live public performances
of musical or theatrical works on a regular basis. For
purposes of this subsection, union member dues and donated
services shall not be deemed contributions.
(c) "Person" means any individual, organization, group,
association, partnership, corporation, trust, or any
combination of them.
(d) "Professional fund raiser" means any person who for
compensation or other consideration, conducts, manages, or
carries on any solicitation or fund raising drive or campaign
in this State or from this State or on behalf of a charitable
organization residing within this State for the purpose of
soliciting, receiving, or collecting contributions for or on
behalf of any charitable organization or any other person, or
who engages in the business of, or holds himself or herself out
to persons in this State as independently engaged in the
business of soliciting, receiving, or collecting contributions
for such purposes. A bona fide director, officer, employee, or

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unpaid volunteer of a charitable organization shall not be
deemed a professional fund raiser unless the person is in a
management position and the majority of the individual's
salary or other compensation is computed on a percentage basis
of funds to be raised, or actually raised.
(e) "Professional fund raising consultant" means any
person who is retained by a charitable organization or trustee
for a fixed fee or rate that is not computed on a percentage of
funds to be raised, or actually raised, under a written
agreement, to only plan, advise, consult, or prepare materials
for a solicitation of contributions in this State, but who
does not manage, conduct or carry on a fundraising campaign
and who does not solicit contributions or employ, procure, or
engage any compensated person to solicit contributions and who
does not at any time have custody or control of contributions.
A volunteer, employee, or salaried officer of a charitable
organization or trustee maintaining a permanent establishment
or office in this State is not a professional fundraising
consultant. An attorney, investment counselor, or banker who
advises an individual, corporation, or association to make a
charitable contribution is not a professional fundraising
consultant as a result of the advice.
(f) "Charitable purpose" means any charitable, benevolent,
philanthropic, patriotic, or eleemosynary purpose.
(g) "Charitable Trust" means any relationship whereby
property is held by a person for a charitable purpose.

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(h) "Education Program Service" means any activity which
provides information to the public of a nature that is not
commonly known or facts which are not universally regarded as
obvious or as established by common understanding and which
informs the public of what it can or should do about a
particular issue.
(i) "Primary Program Service" means the program service
upon which an organization spends more than 50% of its program
service funds or the program activity which represents the
largest expenditure of funds in the fiscal period.
(j) "Professional solicitor" means any natural person who
is employed or retained for compensation by a professional
fund raiser to solicit, receive, or collect contributions for
charitable purposes from persons in this State or from this
State or on behalf of a charitable organization residing
within this State.
(k) "Program Service Activity" means the actual charitable
program activities of a charitable organization for which it
expends its resources.
(l) "Program Service Expense" means the expenses of
charitable program activity and not management expenses or
fund raising expenses. In determining Program Service Expense,
management and fund raising expenses may not be included.
(m) "Public Safety Personnel Organization" means any
person who uses any of the words "officer", "police",
"policeman", "policemen", "troopers", "sheriff", "law

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enforcement", "fireman", "firemen", "paramedic", or similar
words in its name or in conjunction with solicitations, or in
the title or name of a magazine, newspaper, periodical,
advertisement book, or any other medium of electronic or print
publication, and is not a governmental entity. No organization
may be a Public Safety Personnel Organization unless 80% or
more of its voting members or trustees are active or retired
police officers, police officers with disabilities, peace
officers, firemen, fire fighters, emergency medical
technicians - ambulance, emergency medical technicians -
intermediate, emergency medical technicians - paramedic,
ambulance drivers, or other medical assistance or first aid
personnel.
(m-5) "Public Safety Personnel" includes police officers,
peace officers, firemen, fire fighters, emergency medical
technicians - ambulance, emergency medical technicians -
intermediate, emergency medical technicians - paramedic,
ambulance drivers, and other medical assistance or first aid
personnel.
(n) "Trustee" means any person, individual, group of
individuals, association, corporation, not for profit
corporation, or other legal entity holding property for or
solicited for any charitable purpose; or any officer,
director, executive director or other controlling persons of a
corporation soliciting or holding property for a charitable
purpose.

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(o) "Reviewed financial statements" means procedures
performed on financial statements in accordance with
statements on standards for accounting and review services
issued by the American Institute of Certified Public
Accountants, in which a certified public accountant obtains
limited assurance as a basis for reporting whether the
accountant is aware of any material modifications that should
be made to the financial statements for them to be in
accordance with the specified basis of accounting. This
subsection is inoperative on and after January 1, 2029.
(Source: P.A. 99-143, eff. 7-27-15.)
(225 ILCS 460/4) (from Ch. 23, par. 5104)
Sec. 4. Annual reporting for charities.
(a) Every charitable organization registered pursuant to
Section 2 of this Act which shall receive in any 12-month
period ending upon its established fiscal or calendar year
contributions in excess of $500,000 $300,000 and every
charitable organization whose fund raising functions are not
carried on solely by staff employees or persons who are unpaid
for such services, if the organization shall receive in any
12-month period ending upon its established fiscal or calendar
year contributions in excess of $25,000, shall file a written
report with the Attorney General upon forms prescribed by him
or her, on or before June 30 of each year if its books are kept
on a calendar basis, or within 6 months after the close of its

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fiscal year if its books are kept on a fiscal year basis, which
written report shall include a financial statement covering
the immediately preceding 12-month period of operation. Such
financial statement shall include a balance sheet and
statement of income and expense, and shall be consistent with
forms furnished by the Attorney General clearly setting forth
the following: gross receipts and gross income from all
sources, broken down into total receipts and income from each
separate solicitation project or source; cost of
administration; cost of solicitation; cost of programs
designed to inform or educate the public; funds or properties
transferred out of this State, with explanation as to
recipient and purpose; cost of fundraising; compensation paid
to trustees; and total net amount disbursed or dedicated for
each major purpose, charitable or otherwise. Such report shall
also include a statement of any changes in the information
required to be contained in the registration form filed on
behalf of such organization. The report shall be signed by the
president or other authorized officer and the chief fiscal
officer of the organization who shall certify that the
statements therein are true and correct to the best of their
knowledge, and shall be accompanied by an opinion signed by an
independent certified public accountant that the financial
statement therein fairly represents the financial operations
of the organization in sufficient detail to permit public
evaluation of its operations. Said opinion may be relied upon

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by the Attorney General.
(b) Every organization registered pursuant to Section 2 of
this Act which shall receive in any 12-month period ending
upon its established fiscal or calendar year of any year
contributions:
(1) in excess of $15,000, but not in excess of
$25,000, during a fiscal year shall file only a simplified
summary financial statement disclosing only the gross
receipts, total disbursements, and assets on hand at the
end of the year on forms prescribed by the Attorney
General; or
(2) in excess of $25,000, but not in excess of
$300,000, if it is not required to submit a report under
subsection (a) of this Section, shall file a written
report with the Attorney General upon forms prescribed by
him, on or before June 30 of each year if its books are
kept on a calendar basis, or within 6 months after the
close of its fiscal year if its books are kept on a fiscal
year basis, which shall include a financial statement
covering the immediately preceding 12-month period of
operation limited to a statement of such organization's
gross receipts from contributions, the gross amount
expended for charitable educational programs, other
charitable programs, management expense, and fund raising
expenses including a separate statement of the cost of any
goods, services, or admissions supplied as part of its

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solicitations, and the disposition of the net proceeds
from contributions, including compensation paid to
trustees, consistent with forms furnished by the Attorney
General. Such report shall also include a statement of any
changes in the information required to be contained in the
registration form filed on behalf of such organization.
The report shall be signed by the president or other
authorized officer and the chief fiscal officer of the
organization who shall certify that the statements therein
are true and correct to the best of their knowledge; or .
(3) in excess of $300,000, but not in excess of
$500,000, if it is not required to submit a report under
subsection (a), shall file a written report with the
Attorney General upon forms prescribed by the Attorney
General, on or before June 30 of each year if its books are
kept on a calendar basis, or within 6 months after the
close of its fiscal year if its books are kept on a fiscal
year basis, which written report shall include a financial
statement covering the immediately preceding 12-month
period of operation limited to a statement of such
organization's gross receipts from contributions, the
gross amount expended for charitable educational programs,
other charitable programs, management expense, and fund
raising expenses, including a separate statement of the
cost of any goods, services, or admissions supplied as
part of its solicitations, and the disposition of the net

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proceeds from contributions, including compensation paid
to trustees, consistent with forms furnished by the
Attorney General. Such report shall also include a
statement of any changes in the information required to be
contained in the registration form filed on behalf of such
organization. The report shall be signed by the president
or other authorized officer and the chief fiscal officer
of the organization who shall certify that the statements
therein are true and correct to the best of their
knowledge and shall be accompanied by reviewed financial
statements, including a report signed by an independent
certified public accountant stating that the independent
certified public accountant is not aware of any material
modifications that should be made to the financial
statements in order to permit public evaluation of its
operations. The report may be relied upon by the Attorney
General.
(c) For any fiscal or calendar year of any organization
registered pursuant to Section 2 of this Act in which such
organization would have been exempt from registration pursuant
to Section 3 of this Act if it had not been so registered, or
in which it did not solicit or receive contributions, such
organization shall file, on or before June 30 of each year if
its books are kept on a calendar basis, or within 6 months
after the close of its fiscal year if its books are kept on a
fiscal year basis, instead of the reports required by

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subdivisions (a) or (b) of this Section, a statement certified
under penalty of perjury by its president and chief fiscal
officer stating the exemption and the facts upon which it is
based or that such organization did not solicit or receive
contributions in such fiscal year. The statement shall also
include a statement of any changes in the information required
to be contained in the registration form filed on behalf of
such organization.
(d) As an alternative means of satisfying the duties and
obligations otherwise imposed by this Section, any veterans
organization chartered or incorporated under federal law and
any veterans organization which is affiliated with, and
recognized in the bylaws of, a congressionally chartered or
incorporated organization may, at its option, annually file
with the Attorney General the following documents:
(1) A copy of its Form 990, as filed with the Internal
Revenue Service.
(2) Copies of any reports required to be filed by the
affiliate with the congressionally chartered or
incorporated veterans organization, as well as copies of
any reports filed by the congressionally chartered or
incorporated veterans organization with the government of
the United States pursuant to federal law.
(3) Copies of all contracts entered into by the
congressionally chartered or incorporated veterans
organization or its affiliate for purposes of raising

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funds in this State, such copies to be filed with the
Attorney General no more than 30 days after execution of
the contracts.
(e) As an alternative means of satisfying all of the
duties and obligations otherwise imposed by this Section, any
person, pursuant to a contract with a charitable organization,
a veterans organization, or an affiliate described or referred
to in subsection (d), who receives, collects, holds, or
transports as the agent of the organization or affiliate for
purposes of resale any used or second hand personal property,
including, but not limited to, household goods, furniture, or
clothing donated to the organization or affiliate may, at its
option, annually file with the Attorney General the following
documents, accompanied by an annual filing fee of $15:
(1) A notarized report including the number of
donations of personal property it has received on behalf
of the charitable organization, veterans organization, or
affiliate during the preceding year. For purposes of this
report, the number of donations of personal property shall
refer to the number of stops or pickups made regardless of
the number of items received at each stop or pickup. The
report may cover the person's fiscal year, in which case
it shall be filed with the Attorney General no later than
90 days after the close of that fiscal year.
(2) All contracts with the charitable organization,
veterans organization, or affiliate under which the person

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has acted as an agent for the purposes listed above.
(3) All contracts by which the person agreed to pay
the charitable organization, veterans organization, or
affiliate a fixed amount for, or a fixed percentage of the
value of, each donation of used or second hand personal
property. Copies of all such contracts shall be filed no
later than 30 days after they are executed.
(f) The Attorney General may seek appropriate equitable
relief from a court, enter into a binding nonjudicial
settlement agreement, or or, in his discretion, cancel the
registration of any organization which fails to comply with
subsection subdivision (a), (b), or (c) of this Section within
the time therein prescribed, or fails to furnish such
additional information as is requested by the Attorney General
within the required time; except that the time may be extended
by the Attorney General for a period not to exceed 60 days upon
a timely written request and for good cause stated. Unless
otherwise stated herein, the Attorney General shall, by rule,
set forth the standards used to determine whether a
registration shall be cancelled as authorized by this
subsection. Such standards shall be stated as precisely and
clearly as practicable, to inform fully those persons
affected. Notice of such cancellation shall be mailed to the
registrant at least 15 days before the effective date thereof.
(g) The Attorney General in his or her discretion may,
pursuant to rule, accept executed copies of federal Internal

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Revenue returns and reports as a portion of the foregoing
annual reporting in the interest of minimizing paperwork,
except there shall be no substitute for the independent
certified public accountant audit opinion required by this
Act.
(h) The Attorney General after canceling the registration
of any trust or organization which fails to comply with this
Section within the time therein prescribed may by court
proceedings, in addition to all other relief, seek to collect
the assets and distribute such under court supervision to
other charitable purposes.
(h-5) The Attorney General, within a binding nonjudicial
settlement agreement, may accept a written assurance of
discontinuance of any method, act, or practice alleged to be a
violation of subsection (a), (b), or (c) from the person who
has engaged in the method, act, or practice. The Attorney
General may at any time reopen a matter in which an assurance
of discontinuance is accepted for further proceedings if the
Attorney General determines that reopening the matter is in
the public interest. Evidence of a violation of an assurance
of discontinuance is prima facie evidence of a violation of
this Act in any subsequent proceeding brought by the Attorney
General.
(i) Every trustee, person, and organization required to
file an annual report shall pay a filing fee of $15 with each
annual financial report filed pursuant to this Section. If a

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proper and complete annual report is not timely filed, a late
filing fee of an additional $100 is imposed and shall be paid
as a condition of filing a late report. Reports submitted
without the proper fee shall not be accepted for filing.
Payment of the late filing fee and acceptance by the Attorney
General shall both be conditions of filing a late report. All
late filing fees shall be used to provide charitable trust
enforcement and dissemination of charitable trust information
to the public and shall be maintained in a separate fund for
such purpose known as the Illinois Charity Bureau Fund.
(j) There is created hereby a separate special fund in the
State Treasury to be known as the Illinois Charity Bureau
Fund. That Fund shall be under the control of the Attorney
General, and the funds, fees, and penalties deposited therein
shall be used by the Attorney General to enforce the
provisions of this Act and to gather and disseminate
information about charitable trustees and organizations to the
public.
(k) The changes made to this Section by this amendatory
Act of the 103rd General Assembly are inoperative on and after
January 1, 2029.
(Source: P.A. 100-201, eff. 8-18-17.)
Section 99. Effective date. This Act takes effect January
1, 2024.