Do It Yourself

For as long as charitable organizations have been granted favorable treatment under state and federal law, the charitable form has been abused by those with not-so-charitable motivations. Today, tales of fraudulent solicitation are commonplace.¹ To combat such abuses, roughly two- thirds of the states have enacted laws regulating the solicitation of charitable funds.² Typically, these states require that organizations wishing to conduct charitable solicitation register their intention with the relevant state office, file various information disclosures, and pay annual filing fees.³ These laws are designed to serve two primary purposes. First, by requiring organizations to disclose certain information, they assure that the public has access to information from which it may make informed decisions about the relative worthiness of competing organizations. Second, disclosure provides the state with a pool of information about charitable organizations from which it can monitor the activities of the charitable sector, and root out fraudulent practices.⁴

Despite recent efforts, such regulatory measures are not yet uniform across the states,⁵ and organizations intending to carry out national fundraising campaigns must conduct research not unlike that performed by the young securities lawyer asked to "blue sky" a new public offering. Moreover, when the research is complete and the required state filings are made, considerable resources must be employed to assure that the state requirements are met in each future year, and to assure that those states which did not require special filings in the past have not since enacted their own charitable solicitation laws.

Fortunately, the typical small charity has traditionally had no need to concern itself with the intricacies of the various state regulatory regimes: if an organization does not solicit within the boundaries of a given state, that state's regulatory regime simply doesn't apply. Though solicitation from one state into another by means of the telephone or the mails has consistently been held to trigger such requirements, this has not generally amounted to much of a burden on those charities with the resources to conduct multi-state fundraising activities.⁶

The growth of the Internet is changing this. With this new communications technology, even the smallest charity wishing to conduct fundraising activities in all fifty states -- indeed, all over the world -- is no longer constrained by the prohibitively high costs of conducting huge fund- raising campaigns through the more traditional means of mail, telephone, and personal solicitation. A personal computer, a modem, and an account with a local internet provider is all the charity needs to broadcast its message to the world. The issue analyzed in this Note is whether the regulatory restrictions on charitable solicitation currently in force in the majority of states would apply to so-called internet fundraising and, if so, whether such restrictions, which are for the most part believed constitutional as presently written, are rendered overbroad and therefore in violation of the First Amendment insofar as they would restrict this new method of fundraising.

To facilitate an understanding of the nature of internet fundraising, this Note begins in Part II with a brief discussion of the Internet generally and of its value as an efficient communications medium. The discussion then moves in Part III to a review of the major federal caselaw governing the power of the states to regulate charitable solicitation generally. The point of departure for this analysis is, as it must be, the Supreme Court's Riley trilogy.⁷ In the first section of Part IV, the existing conceptual framework is applied in the context of internet solicitation. This analysis, I believe, demonstrates the inadequacy of the present regime in dealing with internet solicitation. This inadequacy is addressed in the second section of Part IV, which explores some currently suggested and somewhat radical proposals for reform. My conclusions appear in the usual place.

II. The Internet

In the simplest terms, the Internet is a world-wide network of computers linked together through high-speed communication lines. Its origins lie in a collection of computer networks (most notably ARPANET⁸) developed during the late 1960s.⁹ Today the Internet has become a sort of "new frontier,"¹⁰ and businesses of all sorts are scrambling to exploit its potential.¹¹ Essentially, the power of the Internet lies in the fact that a computer user working on the smallest of home computers is able to access documents on millions of other, more powerful computers worldwide with very little effort, and at nominal cost. But as a recent text on the Internet notes, "[i]t would be a mistake . . . to think of the Internet as a computer network, or even a group of computer networks connected to one another. From our point of view, the computer networks are simply the medium that carries the information. The beauty and utility of the Internet lie in the information itself."¹²

For all its potential, though, the Internet is young, and for the moment remains the province of a small but rapidly growing community of users.¹³ Nevertheless, it is of particular interest to small nonprofit organizations interested in bringing their message to a national (or global) audience, and who otherwise would be prevented from doing so due to their limited resources. As the nonprofit organizations FAQ¹⁴ observes, "as the net grows, its value will increase immeasurably, and nonprofit organizations need to have access to on-line resources."¹⁵

It was perhaps inevitable that organizations of all types would develop ways to wring money from the new communications technology. So it is that today, with varying degrees of success,¹⁶ organizations of all sorts attempt to raise money over the Internet. Notably, this activity does not look much different from traditional pre-Internet business activity: commercial companies try to attract dollars by advertising their products and services online, and even providing for on-line purchasing,¹⁷ and nonprofit companies do so by requesting donations.¹⁸

Although truly successful internet fundraising drives may not become a reality for a few more years¹⁹ the draw of undertaking such fundraising efforts is strong. For one thing, simple internet fundraising is inexpensive: with no assets but a personal computer and a basic internet account, even the smallest nonprofit is able to reach millions of potential donors by simply writing a homepage²⁰ for the organization which describes the organization's mission and requests donations. Once the cost of "getting online" is absorbed, there is no additional cost to reach additional people: where each additional phone call or envelope costs the organization a discrete amount of money, there is no such consideration when communicating through the Internet.²¹

The question, then, is whether the simple act of placing a request for charitable donations on an internet homepage immediately triggers the charitable solicitation laws in the majority of states which have such laws and, if so, whether those laws therefore place an unconstitutional burden on the First Amendment right to solicit charitable donations. The question is a pressing one: as of this writing, at least four state attorneys general have publicly taken the position that the activities I describe (publishing a homepage incorporating a donation request) constitute solicitation such that the laws of their respective jurisdictions are implicated,²² and it is only a matter of time until one of these states brings a test case against some unsuspecting charity.

To try to predict the outcome of that case, it is necessary to understand the legal framework and, more specifically, the recognized constitutional restrictions on the states' ability to regulate charitable solicitation.

III. The Legal Framework

Dating at least from the Statute of Charitable Uses,²³ the state has assumed the dual role of protector and regulator of the charitable sector. Today, protection is usually accomplished through the granting of exemptions from taxation and other regulatory burdens imposed on similar non-charitable business organizations. Regulation is designed to assure that only "deserving" organizations are provided with the beneficial treatment accorded charities: thus, "[s]tate regulation of charitable solicitation is arguably a natural and necessary outgrowth of the states' interests vis-s-vis charities."²⁴

The power of the states to regulate charitable solicitation has largely been defined by three key U.S. Supreme Court decisions, Schaumburg v. Citizens for a Better Environment,²⁵ Maryland v. Joseph H. Munson Co.,²⁶ and Riley v. National Federation of the Blind.²⁷ Because the question of state restrictions on internet fundraising must be analyzed -- at least initially -- within the framework of the so-called Riley trilogy, I will set out that framework here.

The seminal modern case holding charitable solicitation to constitute protected speech is Schaumburg.²⁸ At issue was whether a village ordinance restricting door-to-door and other public solicitation by charitable organizations applying less than 75% of the money raised to charitable purposes was in violation of the First Amendment. Citizens for a Better Environment (CBE) was a nonprofit environmental organization which conducted door-to-door charitable solicitation in the Schaumburg, Illinois. A Schaumburg ordinance required every charitable organization intending to solicit funds either door-to-door or upon the public streets of the village to obtain a permit to do so. To obtain a permit, an organization was required to demonstrate that at least 75% of all donations received would be used directly for the organizations' charitable purposes, and not for salaries or commissions paid to solicitors, or administrative expenses such as rent, telephone, advertising expenses, and salaries.²⁹ CBE applied for a permit under the ordinance, but its application was denied because it could not demonstrate that it satisfied the 75% limitation. CBE then sued to enjoin enforcement of the ordinance on First and Fourteenth Amendment grounds, and received summary judgment in the District Court. The Seventh Circuit affirmed.

The Supreme Court affirmed. Upon a lengthy review of prior cases, the Court held that:

Prior authorities . . . clearly establish that charitable appeals for funds, on the street or door to door, involve a variety of speech interests -- communication of information, the dissemination and propagation of views and ideas, and the advocacy of causes -- that are within the protection of the First Amendment. Soliciting financial support is undoubtedly subject to reasonable regulation but the latter must be undertaken with due regard for the reality that solicitation is characteristically intertwined with informative and perhaps persuasive speech seeking support for particular causes or for particular views on economic, political, or social issues, and for the reality that without solicitation the flow of such information and advocacy would likely cease. Canvassers in such contexts are necessarily more than solicitors for money.³⁰

Finding that charitable solicitation is a form of speech protected under the First Amendment, the court next considered whether the village ordinance at issue was a permissible restriction on that speech. The village argued that the 75% requirement furthered substantial governmental interests in "protecting the public from fraud, crime and undue annoyance." While noting that these interests were indeed substantial, and therefore might justify infringement upon otherwise protected First Amendment activity, the Court held that the 75% limitation was only peripherally related to these interests, and therefore not "compelling," as required in the First Amendment context: "The Village may serve its legitimate interests, but it must do so by narrowly drawn regulations designed to serve those interests without unnecessarily interfering with First Amendment freedoms."³¹ As required in the case of overbreadth analysis,³² upon finding that there existed a class of charities to whom the statute could not be constitutionally applied (namely, those whose activities required that they spend more than 25% of their donations on fundraising expenses), the Court invalidated the statute as overbroad.³³

Four years later, the Court had opportunity to revisit the question of state power to restrict charitable solicitation. In Maryland v. Joseph H. Munson Co.³⁴ a professional fundraiser (Munson) had brought suit to enjoin enforcement of a Maryland law which flatly prohibited charitable organizations from paying fund raising expenses of more than 25% of the amount raised. Though similar to the ordinance at issue in Schaumburg, the state law at issue here was somewhat more flexible in that it provided for a waiver of the percentage limitation in those instances where the 25% limitation "would effectively prevent a charitable organization from raising contributions," and excluded the costs and expenses of solicitation from the definition of "fee."³⁵

Nevertheless, upon review of its Schaumburg decision, the court held that the immediate statute was not saved from overbreadth by the existence of the more permissive provisions: "Where, as here, a statute imposes a direct restriction on protected First Amendment activity, and where the defect in the statute is that the means chosen to accomplish the State's objectives are too imprecise, so that in all its applications the statute creates an unnecessary risk of chilling free speech, the statute is properly subject to facial attack. . . . The possibility of a waiver may decrease the number of impermissible applications of the statute, but it does nothing to remedy the statute's fundamental defect."³⁶ Accordingly, the Maryland statute was invalidated as overbroad.³⁷

Most recently, the First Amendment protection of charitable solicitation was arguably expanded³⁸ in Riley v. National Federation of the Blind.³⁹ In Riley, the Court struck down provisions of a North Carolina statute which set forth a three-tiered fee schedule of permissible fees for professional fundraisers, and prohibited certain fundraising activity not in compliance with the statutory formula. Specifically, the North Carolina Charitable Solicitations Act defined "reasonable fee" as a percentage of gross revenues solicited⁴⁰ and required professional fundraisers to disclose to solicitees the fundraiser's name, the address of the fundraising company, and the average amount of money the company actually turned over to the charity as a proportion of total revenue collected. A coalition of fundraisers, charities, and donors sued to enjoin enforcement of the Act on First Amendment grounds.

The Supreme Court, Justice Brennan writing, affirmed the decision of the Fourth Circuit invalidating the statute as overbroad. Reaffirming the Schaumburg and Munson holding that charitable solicitation is a form of speech protected under the First Amendment, the Court applied standard First Amendment analysis, weighing the government's interest against the burden on speech. Both Schaumburg and Munson, noted Brennan, involved the government's substantial interest in preventing fraudulent solicitation of funds from the public, an interest alleged by the Riley defendants as well. The Riley defendants explicitly asserted the additional government interest of ensuring that the maximum amount of funds solicited on the part of a charity actually reach that charity. The Court was unimpressed, and, applying "exacting First Amendment scrutiny,"⁴¹ under which analysis a given restriction on protected speech is permissible only if it is narrowly tailored to achieve a compelling governmental interest,⁴² the Court held that none of these asserted interests was sufficiently compelling to justify the restrictions on protected speech,⁴³ and invalidated the statute as overbroad.⁴⁴

The Riley opinion is concerned primarily with the use of percentage caps on fundraising expenses, a topic which is beyond the scope of this Note. However, some language in the opinion is of interest here. Upon finding the statutory requirement that professional fundraisers disclose to potential donors the percentage of charitable contributions collected during the previous 12 months that were actually turned over to charity to constitute a content-based regulation of speech, the Court noted:

Moreover, the compelled disclosure will almost certainly hamper the legitimate efforts of professional fundraisers to raise money for the charities they represent. First, this provision necessarily discriminates against small or unpopular charities, which must usually rely on professional fundraisers. Campaigns with high costs and expenses carried out by professional fundraisers must make unfavorable disclosures, with the predictable result that such solicitations will prove unsuccessful. Yet the identical solicitation with its high costs and expenses, if carried out by the employees of a charity or volunteers, results in no compelled disclosure, and therefore greater success.⁴⁵

Thus, the Court indicated that fundraising restrictions which discriminate against the smaller charities are, at a minimum, constitutionally suspect. Concern over the welfare of the smaller organizations is further apparent in the Court's suggestion of alternative methods of meeting the state's interests: the Court suggested two ways in which the states might advance their substantial interests in preventing fraudulent solicitation in a more narrowly tailored fashion. First, the states "may [themselves] publish the detailed financial disclosure forms [they] require[] professional fundraisers to file." Alternatively, the Court pointed out that the states may simply vigorously enforce their antifraud laws. Either of these alternatives would advance the states' interests without unnecessarily burdening the smaller organizations.

IV. The Framework Applied

Thus, under Schaumburg, Munson, and Riley, the proper standard by which to analyze restrictions on charitable solicitation in the First Amendment context is strict scrutiny, and a statute restricting such solicitation will be upheld only if narrowly tailored to serve a compelling government interest. Furthermore, such statutes must not discriminate against the smaller charities. Those states which have chosen to regulate charitable solicitation have typically set forth various organizational filing requirements which organizations must satisfy prior to soliciting funds.⁴⁶ As indicated in Riley, laws requiring organizations wishing to solicit funds in a certain jurisdiction to register with the local authority withstand constitutional analysis because such requirements are deemed not to constitute too great a burden on speech, and serve compelling state interests.⁴⁷ Generally, then, "[s]o long as the required information is objective, and state officials have little discretion in rejecting or delaying a charity's solicitation campaign, a registration requirement will be upheld."⁴⁸

When considered in light of the realities of pre-Internet fundraising, the regime laid down by Riley and its predecessors is sensible: those organizations which are large enough to conduct huge solicitation drives on a multi-state basis are in a financial position (and sophisticated enough) such that the state filings constitute only a relatively insignificant burden on the speech interests of those organizations.⁴⁹ In this way, protected speech is not chilled by the regulation of charitable solicitation -- the large organizations can overcome the burden with relative ease, and there is no burden at all for the smaller organizations, who could not engage in multistate solicitation efforts anyway. This is constitutionally relevant because, as the Court stated in Riley, regulation of charitable solicitation cannot discriminate against the speech interests of the smaller organizations.⁵⁰

But as we have seen, the Internet has greatly expanded the number of organizations capable of carrying out multi-state solicitation activities. Essentially, to reach potential donors in all fifty states, an organization needs nothing more than a personal computer and an account with a local internet provider. Once established, the organization's charitable appeal can instantly made available to the entire internet community. The large national and international charities with the resources necessary to assure compliance with the various state regulatory regimes are thus no longer the only ones affected by state charitable solicitation laws. Instead, even the smallest organizations, operating on shoestring budgets, are beginning to tap the national contributions market.

If those states asserting jurisdiction over internet fundraising are justified in doing so, the result will be that even the smallest organization, too small to afford multi-state solicitation efforts over the telephone or through the mail, will be required to register under numerous state charitable solicitation laws simply by virtue of utilizing the new communications technology to solicit donations. If they do not (or cannot) assure state-law compliance, they will be forced to decide between risking legal action in a number of foreign states, or refraining from speaking altogether. The question is whether under this new mix of facts those state laws impermissibly restrict speech protected under the First Amendment.

But there is another, more interesting question which must first be addressed: from a legal perspective, should internet fundraising appeals be treated any differently solely because they take place on the Internet? That is, why should communication over this new medium be treated as anything other than communication, for which we already have a rich regulatory scheme? On the one hand, it has been noted that "[n]o matter how often one repeats the statement, it cannot be true that `[d]ifferent communications media are treated differently for First Amendment purposes.'"⁵¹ Laurence Tribe echoes this sentiment: "the Constitution's norms, at their deepest level, must be invariant under merely 'technological' transformations. Our constitutional law evolves through judicial interpretation, case by case, in a process of reasoning by analogy from precedent."⁵²

The contrary view is expressed by Lawrence Lessig:

Should this new space, cyberspace, be regulated by analogy to the regulation of other space, not quite cyber, or should we give up analogy and start anew? In Bruce Ackerman's terms, should we muddle into this new space as ordinary observers, just applying our old ways of thinking, or should we enter this world as scientific policymakers, armed with a comprehensive view, structuring the environment of this world to fit with this comprehensive view?⁵³

To simplify matters, I will discuss each possibility, and the implications of each for internet fundraising, separately.

Regulation by analogy

As professors Krattenmaker and Powe recognize, the natural response to the development of new means of communication is to regulate activity in the new medium by analogy -- that is, by reference to the existing and well-developed body of law regarding communication generally.⁵⁴ The approach is attractive for a number of reasons, the most obvious being simplicity: in applying a set body of law to new circumstances, the advocate must simply look for factual similarities between the traditional scenario and that of the new contextual setting, and apply the old rules to the new facts in a logical manner.

A perhaps more important advantage to simply applying the old rules in the new arena is consistency -- there is something compelling about the statement that "communication is communication, regardless of the medium."⁵⁵ Surely, at some level communication is just that -- the expression of words or ideas. As indicated by Justice Blackmun, concurring in a cable television controversy, if the medium in which the expression takes place is to be relevant at all to First Amendment analysis, it must somehow change the nature of the communication: "In assessing First Amendment claims concerning cable access, the Court must determine whether the characteristics of cable television make it sufficiently analogous to another medium to warrant application of an already existing standard or whether those characteristics require a new analysis."⁵⁶

As suggested in Part II, the new technology does indeed alter the nature of communication in the charitable solicitations context -- it renders it inexpensive. Nationwide solicitation campaigns are no longer the exclusive tool of the large organizations, but rather even the smallest of the small may now take part. If we adopt the approach suggested by Krattenmaker and Powe, to determine whether the various state charitable-solicitation regimes unduly intrude upon the protected speech interest in such solicitation we must simply apply the existing framework to the new set of facts, and reach the logical conclusion. That framework, of course, is the Riley trilogy. The first step of this analysis is to determine whether the act of placing an appeal for funds in a document on a computer in one state can subject the organization responsible for the appeal to the jurisdiction of a foreign state. Unfortunately, there is as yet no law on the subject. However, though not entirely on point, one recent case may shed some light on the matter.

In United States v. Thomas,⁵⁷ the Court of Appeals for the Sixth Circuit had the opportunity to discuss the legal status of computer-borne communications in the First Amendment context. Robert and Carleen Thomas ran an adult-oriented bulletin board service, the "Amateur Action BBS," (AABBS) from their home in Milpitas, California. The site was accessible to others around the nation via modems and the telephone lines. Working with the local U.S. Attorney's office, a postal inspector purchased an AABBS membership and succeeded in downloading allegedly obscene images from the bulletin board.⁵⁸ The U.S. Attorney's office filed criminal charges against the Thomases for, among other things, transmitting obscenity over interstate phone lines from their computer.⁵⁹ By relatively conservative Memphis community standards, the images involved were found by a jury to in fact constitute obscenity, and the couple was convicted.⁶⁰

On appeal, the Sixth Circuit affirmed the convictions holding, inter alia, that the crime of "knowingly us[ing] a facility or means of interstate commerce for the purpose of distributing obscene materials" does not require proof that the defendants had specific knowledge of the destination of each transmittal at the time it occurred. Of interest in the Internet context, in determining that the crime actually occurred in Tennessee (rather than California), the court placed considerable weight on its finding that "substantial evidence introduced at trial demonstrated that the AABBS was set up so members located in other jurisdictions could access and order [obscene] files which would then be instantaneously transmitted in interstate commerce."⁶¹

If the reasoning of the Thomas court is followed by the state courts,⁶² it appears that communication via computer constitutes sufficient contact with the foreign state to subject the communicator to local law⁶³. To be sure, Thomas might be distinguished on the ground that it is a federal case interpreting federal law, and therefore not binding on state courts interpreting state laws. Though this certainly robs the opinion of any precedential authority in the state law context, it nevertheless constitutes persuasive authority for the proposition that communication over telephone lines is subject to the same legal restrictions whether the transmitted communication is vocal or mechanical. Thomas might also be distinguished from a true internet-related case on the grounds that users of the AABBS actually had to dial the California phone number to access the bulletin board, where internet users generally dial a local number and connect to foreign locations by network hopping. But this, I think, is a distinction without a difference: it is difficult to see how the fact that the connection is over a network of telephone lines rather than through direct dialing is in any way relevant. Applied to the charitable solicitation context, then, the import of Thomas is clear: soliciting funds over the Internet, where users download webpages residing in foreign jurisdictions, in all likelihood will constitute sufficient contact to subject the organization to the jurisdiction of the foreign state, and therefore to the foreign charitable solicitation regime.

It next must be determined whether such interstate communication actually constitutes "solicitation" encompassed by the laws of the individual states. This, unfortunately, is a matter which must be settled by each state individually, and no definite answer can be divined from the language of any one statute. Though a full review of all of the relevant state laws is beyond the scope of this Note, even the briefest survey of some of the state charitable solicitation regimes strongly indicates that internet solicitation will be held in many jurisdictions to be subject to charitable solicitation regulation. For example, in New York, solicitation covered by the charitable solicitations act is defined as the making of a request "through any medium," regardless of whether any contribution is received.⁶⁴ In Arizona, the charitable solicitations law applies to all "request[s] of any kind for a contribution."⁶⁵ Arkansas law reaches "each request for a contribution."⁶⁶ The California regime applies to "any request, plea, entreaty, demand, or invitation, or attempt thereof, to give money or property, in connection with which . . . any appeal is made for charitable purposes."⁶⁷ Finally, Massachusetts law applies to organizations "soliciting or collecting by agents or solicitors, upon ways or in any other public places within the commonwealth to which the public have a right of access."⁶⁸ Certainly, it is difficult to see how internet fundraising is not caught by any of these strikingly broad provisions. As currently written, then, the statutes of at least five states can easily be construed to reach internet fundraising. Indeed, it is likely that most if not all of the state regimes may be so construed, and that those statutes which fail to as currently written can be appropriately amended without much trouble. The question is whether these laws would pass constitutional muster under Riley and its predecessors.

Though this is certainly a matter of interpretation, and at this point only conjecture is possible, it is my conclusion that state laws which require foreign charities to register in their jurisdictions are, under Riley and its predecessors, unconstitutional to the extent that they chill the speech of the smaller organizations. It could not be more clear that charitable solicitation is protected speech under the First Amendment. As indicated above, Riley supports the proposition that state laws may not discriminate against small and unpopular charities in the name of curbing charitable solicitation fraud. Though registration requirements have in the past been upheld as reasonable, such cases were decided at a time when the multistate fundraising drive was the province of the larger, more powerful organizations. Applied to the fundraising realities of today, shaped in large part by the new communications technology, these laws can no longer be seen as unburdensome on the speech interests of smaller organizations. Because such laws put the small organization to the choice of running afoul of state regulatory requirements or refraining from making charitable solicitations on the Internet, those laws are overbroad, and should be invalidated.

Regulation anew

Thus, if the existing legal framework is simply applied to state laws in the Internet context, it is clear that either a large number of state laws or a larger number of charitable organizations will be fundamentally affected . However, as Professor Lessig suggests, there is an alternative to simply applying existing law in the Internet context. That is to start on a clean slate, with an eye toward policy goals and unencumbered by arguably irrelevant precedent.⁶⁹

There has been talk for some time on some of the nonprofit-related newsgroups and listservs⁷⁰ about the form such a new regulatory system might take. Harriet Bograd, a Research Affiliate at the Yale Program on Nonprofit Organizations has organized a new listserv dealing specifically with how to use the Internet to foster nonprofit accountability. In the internet fundraising context, discussion has focused on the benefits and viability of implementing a new system of registration, to be conducted on the Internet.⁷¹ Ideally, such a system would provide nonprofits with the ability to meet all of the state regulatory requirements by placing certain information online with a central repository. The benefits of such a system would be manifold: registration would be rendered simple and inexpensive for organizations wishing to solicit donations on the internet, regulatory bodies would enjoy easy access to the filings of organizations stationed in many different states, and the public could quickly conduct preliminary research on organizations to which they are inclined to make donations.⁷²

The desirability of a uniform and comprehensive system of charitable registration is readily apparent. Myles McGregor-Lowndes, a Professor at the Queensland University of Technology in Queensland, Australia, has gone so far as to put up a web page which sets forth a "utopian" vision of what such a system might look like.⁷³ Under his proposed system, nonprofit organizations would be required to disclose financial and other relevant information only on their own web pages, with no local government filing requirements. Instead, the organizations would merely be required to keep their pages current. The appropriate regulatory body would maintain a linked, searchable index of all of the organizations' pages. As Professor Lowndes points out, under such a system, regulatory agencies would easily be able to access current organizational information in a format which "would lend itself to computer automated analysis."⁷⁴

Taking Professor Lowndes' Utopia to the stage of development, a German organization called the German Charities Institute (Deutsches Spendeninstitut Krefeld (DSK)) has already implemented a similar program for German charities. Founded in September, 1995 by LOGO-S Software, Consulting & Service GmbH, the Institute is a non-governmental, nonprofit organization which catalogues the financial reports and similar information from participating charities in a searchable online database, and provides participating charities with the right to use the Institute's "seal" indicating that the organization's filings are online with the Institute. Participating organizations are provided with software which allows them to easily update their filings with the Institute, and software on the Institute's side automatically converts these filings into HTML format and makes the information available to the internet community. In addition to providing free online access to the organization database, the Institute is currently putting together a CD Rom containing data for all filing organizations, which should be available by April of 1996 for a small fee.

According to Mr. Christoph Brocks, managing director of the Institute and founder of the parent company, as of March 1996, the database contained some 14,700 organizational web pages, and the Institute had received over 70,000 online visitors.⁷⁵ The number of visitors now averages 1,200 per day, with a weekly growth rate of 15-30%. Most interesting, organizations in three other undisclosed countries have inquired about becoming a part of the project, and an announcement is expected in May of 1996 by a group in another European country that they are adopting the system as well.

As described by Mr. Brocks, the philosophy of the organization is "to give more trust to the German population in charities and to motivate the people and companies in philanthropic giving. We believe in the principle of the "control of million eyes" of the fund raising organizations."⁷⁶ Remarkably, Mr. Brocks' statement echoes the justification for regulation in the first place: as indicated in Part I, state charitable solicitation restrictions primarily serve the dual purposes of informing the public about the character of the soliciting organizations, and providing regulators with a tool to monitor such activities for fraud.⁷⁷ By maintaining required filings in a central repository on the Internet, both the public and regulators are provided with the ability to assess the relative merits of charitable appeals. Of course, to have access to the database it is necessary to have access to the Internet. But as the only potential donees affected by internet solicitation are those who are already on the Internet, this indicates not that the system is somehow inadequate, but rather that it is remarkably efficient.

V. Conclusions

As we have seen, the advent of the Internet has provided small nonprofit organizations with unprecedented ability to reach a worldwide audience. Fundraising campaigns which were once the province of only the largest organizations are being undertaken by even their smallest siblings. While legal development is plodding and methodical, technology advances rapidly, and as of this date there is no structure in place which can deal with the issues raised by the new technology effectively. As Professor Tribe puts it, "[t]he rate of technological change has outstripped the ability of the law, lurching from one precedent to another, to address new realities."⁷⁸ Roughly, the legal community has three alternatives.

First, it might do nothing. Under this view, the law of charitable solicitations as it now stands should not be reinterpreted to account for the fact that what was once a relatively small burden on the speech of large organizations is now a very real burden to organizations of all sizes. In such a world, the small organization wishing to do no more than place a request for donations on an internet homepage would be required to consult the laws of all fifty states to assure that it has not run afoul of any of the various charitable solicitation regimes. This is the course of action taken today by the more prudent of organizations, but only those with sufficient resources. Those without the resources must choose between risking sanctions in any state which restricts solicitation activity, or refraining from making any communication at all. This approach has the advantage that the more abusive of professional fundraisers will be discouraged from "shopping" for small, vulnerable nonprofit clients, and fraudulently profiting from the new technology at the expense of the charities and their donors. However, the cost to society of so chilling the speech of the smallest organizations would be great.

An alternative would be to modify the law of charitable communications in its present state to better fit the new factual setting brought about by the new communications technology. Such an analysis might conclude that currently enforced state law restrictions on charitable solicitation unduly restrict the protected speech of small organizations. The solution would be for each state to re-write its law to exempt organizations of a certain size from the coverage of the restriction in the internet context.⁷⁹ Though from the charity's point of view this would represent an improvement over the current system, the cost would likely be an increase in fraudulent solicitation schemes which the states have a substantial interest in preventing.⁸⁰

To this observer, by far the best approach would be to construct a new model of charitable solicitation regulation to deal with internet fundraising. Taking account of the increased capabilities of the new communications technology, such a system would ideally provide for a uniform set of disclosures mandated of all organizations. But instead of filing such disclosures with each state, the organizations should simply be required to make the information available to the internet community at large, either at a single document repository or through a link from the organization's homepage. Not only would this greatly simplify matters for the affected organizations, but it would also better serve the purposes of disclosure laws themselves: when an internet user stumbles across a charity on the Internet and considers making a donation, it would be far easier for that person to simply follow a link to that organization's disclosure page, and make an on-the-spot assessment of the organization than to require him (as is currently the case) to contact the charities bureau in the organization's home state (or even in his own state) to request such information. Furthermore, this information would be readily available to state regulators, who would at once enjoy simple access to the information and be relieved of the costly and time-consuming task of cataloging and maintaining voluminous disclosure archives.

Of course, the need for a universal regime of charitable solicitation laws has been noticed prior to the creation of the Internet. In recent years there have been numerous legislative efforts which would have involved fundraising regulation at the national level.⁸¹ There is even a Model Act.⁸² And as of this writing, 25 states have "agreed in principle" to abide by a uniform registration form⁸³. The advent of the Internet has simply made the need for adoption of a universal regime more pressing. But is has done more: it has made uniform registration more feasible: by allowing for citizens and regulators of any state to access information on a single computer (or group of computers) housing the required filings, the Internet has removed the logistical barriers which previously would have made universal registration difficult or even impossible to implement.

In closing it must be emphasized that the United States is not the only nation with charitable organizations, and which has undertaken the task of regulating charitable solicitation. For example, it is believed by at least one observer that charitable solicitation restrictions in Queensland, Australia clearly catch internet fundraising.⁸⁴ Certainly it would serve the interests of all concerned if charities from many countries were to participate in a global registration system: just as the internet has provided small organizations with the ability to engage in multistate fundraising, so has it swung wide the doors to the international contributions market. Though this represents a tremendous opportunity for the nonprofit sector, it comes with the threat of expanded exposure to fraudulent solicitation schemes which, of course, are not unique to the United States. Ideally, any internet-based system of charitable registration would take account of this reality. Impossible? Well, I believe that in time the new technology will do far more to blur the lines between political boundaries than any other technological revolution to date. An international charitable registration system is in everyone's interest. It is rational. And, for the first time ever, it is feasible. The question is whether we will recognize this.

Citations

1. For a discussion of some recent scandals, see, e.g., James J. Fishman & Stephen Schwarz, Nonprofit Organizations: Cases, Materials and Problems 272 (Dec. 1994 draft) (on file with the author).

2. As one observer notes, "[c]oncerns by the general public and legislators over fraud, excessive costs, commercial ventures, tax avoidance, improper accounting practices, and further abuses of charitable purposes" have stimulated the trend to regulating the nonprofit sector. Joseph R. Mixer, Principles of Professional Fundraising 249 (1993). For a state- by-state breakdown of the various state legislation, see Survey of State Laws on Charitable Solicitation, (Philanthropy Monthly, 1995); Bruce R. Hopkins, The Law of Fundraising (1991); Exempt Organizations Reporter (CCH 1995). For a discussion of the historical origins of the regulation of charitable solicitation, see Leslie G. Espinoza, Straining the Quality of Mercy: Abandoning the Quest for Informed Charitable Giving, 64 So.Cal.L.Rev. 605, 636-53 (1991).

3. State Attorneys General: Powers and Responsibilities 187-88 (Lynne M Ross, ed. 1990); see also Fishman & Schwarz, supra note 1, at 303 ("Registration requirements and mandatory public disclosure of financial information at a central repository have become the most common forms of regulation."). State charitable solicitation laws also go to great lengths to restrict the activities of professional fundraisers. See Ellen Harris, Lynn S. Holley & Christopher J. McCaffrey, Fundraising into the 1990s: State Regulation of Charitable Solicitation After Riley, 24 U.S.F.L. Rev 571, 588 (1990) ("The primary state concern regarding charitable solicitation campaigns is the low percentage of contributions often received by a charity."). Though restrictions on the use of professional fundraisers are certainly an important consideration for nonprofit organizations soliciting over the Internet, this Note is concerned explicitly only with registration and filing requirements.

4. State Attorneys General, supra note 3, at 186-87.

5. New York's statute, for example, has been described by at least one observer as "horrifyingly elaborate" relative to those of other states. Fishman & Schwarz, supra note 1, at 302. See generally N.Y. Exec. Law Art. 7-A (McKinney 1921 Supp. 1996). There has been a movement in recent years to implement universal filing requirements, and in 1986 a Model Act was promulgated by the National Association of Attorneys General. Nat'l Ass'n of Att'y Gen. Comm. on Trusts and Solicitations, Nat'l Ass'n of St. Charity Officials, A Model Act Concerning the Solicitation of Funds for Charitable Purposes (1986). Today, at least 25 states have "agreed in principle" to the adoption of a uniform registration form. However, it is feared by some that the cumulative effect of minor differences in drafting across the states will destroy the form's uniformity. For a skeptical look at the desirability of a national charitable solicitations regime, see Bruce Hopkins, Charitable Solicitation Acts and Fund Raising: Some Proposals for Relief (Part 7), 58 Fund Raising Mgmt (May 1, 1992).

6. See, e.g., International Society for Krishna Consciousness v. City of Houston, 689 F.2d 541 (1982) (upholding a typical registration requirement).

7. The trilogy is composed of three modern Supreme Court decisions regarding charitable solicitation: Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980), Maryland v. Joseph H. Munson Co., 467 U.S. 947 (1984), and Riley v. National Federation for the Blind, 108 S. Ct. 2667 (1988). The term "Riley trilogy" was provided by the court in Young v. New York City Transit Authority, 903 F.2d 146, 154-157 (2d Cir. 1990).

8. In 1968, the Department of Defense Advanced Research Projects Agency (ARPA) contracted with the Massachusetts-based technology firm Bolt, Beranek and Newman (BBN) for the construction of a packet-switching computer network composed of widely dispersed DOD computers. It was from this network that the major protocols and services which today make up the Internet emerged. The original ARPA network eventually outgrew its usefulness, and was dismantled in 1988. See generally Aaron Zitner, A Quiet Leap Forward in Cyberspace, The Boston Globe, Sept. 11, 1994 at A85, Internet Rooted in Earlier Nationwide Net, Newsbytes News Network, Sept. 12, 1994, Gary Anthes, The History of the Future, Computerworld, Oct. 3, 1994, at 101.

9. Harley Hahn & Rick Stout, The Internet: Complete Reference, 2 (1994). For a more technical description of the Internet, see supra note 8 and sources cited.

10. The media is apparently obsessed with the idea of the Internet as the New Frontier. Indeed, a Westlaw search for "internet and 'new frontier'" turned up 193 documents in the magsplus database alone. For a roughly representative sample of the articles, see Martin Marshall, Databases and The Internet: Businesses Flock to put Live Corporate Data on the Web, Communications Week, Mar. 11, 1996; T.C. Doyle, The Internet is Becoming the New Frontier for a VAR 'Gold Rush,' Varbusiness, Feb. 1, 1996; Lisa Erickson, Hoops on the Internet: NBA Steps Into New Frontier, Puget Sound Bus. J., Feb. 16, 1996.

11. "Everyone is scrambling to get something on the Web." Martin Marshall, Databases and the Internet: Businesses Flock to put Live Corporate Data on the Web, Communications Week, Mar. 11, 1996 (quoting software executive Arthur Clancy). On February 27, 1996, AT&T announced that it will begin providing its long distance subscribers with a basic internet account free of charge for one year. AT&T, News Release: AT&T Offers One-Year Free Internet Trial, Flat Rate, Unlimited Access, Feb. 27, 1996. To this observer, the announcement was noteworthy because it indicates that a company as large as AT&T has reached the conclusion that the Internet is something more than a passing fad, and is banking on the future of the new technology to such an extent that it is willing to offer its customers free access in order to establish itself as a major player.

12. Hahn & Stout, supra note 9, at 2.

13. Because there is no central authority in charge of internet administration, compiling accurate statistics about worldwide internet usage is a difficult task. One of the more conservative estimates is that of John S. Quarterman at Matrix Information and Directory Services (MIDS), which found 13.5 million internet users as of October 1994, and projected a growth rate of 100% per year. Mr. Quarterman's estimates are considered among the most reliable. See generally http://www.anamorph.com/docs/stats/stats.html.

14. On the Internet, the term "FAQ" refers to any of a number of lists of "frequently asked questions" about a wide range of topics. FAQs are written piecemeal by those internet users who decide to contribute information, and are typically maintained by a single editor, who may pass the task on to another when he tires of it. FAQs are becoming very useful resources, and there are currently thousands of them, covering everything from internet basics to keeping tropical fish to dealing with headaches.

The FAQ referred to here is that for the USENET newsgroup soc.org.nonprofit, a worldwide discussion forum for people interested in nonprofit organizations and activities. The FAQ is maintained by Putnam Barber, and the latest version is available at http://www.eskimo.com/~pbarber/npo-faq.html [hereinafter "FAQ"]. For a brief introduction to USENET, see infra note 21.

15. FAQ § 11. Responding to the question "what use is the Internet to a nonprofit organization?," the FAQ notes:

On-line technology can be a great asset to NPOs and other community- service agencies. However, visions of becoming a super-efficient organization, reaching lots of new donors and clients, and effortlessly administering an agency -- all with on-line technologies -- will not come to pass with an internet account. While on-line technologies do offer lots of benefits, our FAQ contributors agreed that none of the things for which they use the Internet has altogether replaced faxes, phone calls, press releases or face-to-face meeting.

Every nonprofit organization has two primary resources: people and their ideas. What the Internet offers is an easy, immediate, extremely efficient way to connect with people and ideas.

FAQ § 11.

For a useful introduction to the Internet written for nonprofit organizations who would like to participate, see B. Savage, M. McGregor-Lowndes & L. Deakin, Getting Your Nonprofit Organisation Started on the Internet: Software, Hardware, Service Providors and Other Issues, Program on Nonprofit Corporations Working Paper 59 (Queensland University of Technology, Aug. 1995).

16. As the FAQ notes, the value of the Internet as a communications medium is directly related to the number of people who use it:

Since the Net population is still fairly small and the target population in most cases in not on-line, the value of using the Net as a way to distribute information or to find donors/volunteers is small at best. However, the Net as a way to network and to communicate with peers is invaluable, and access to various on-line information depositories can drastically reduce time needed for research.

Everyone agreed that, as the Net grows, its value will increase immeasurably, and nonprofit organizations need to have access to on-line resources. Every major federal agency is already on-line or is going on-line with something. With the political winds changing, efficiency is becoming even more essential to NPOs. One contributor to this thread commented, "I have a feeling of urgency about the subject of NPOs on the 'Net: that as technology continues to accelerate, we could very easily be left behind if we do not develop our own survival strategies.

As a general matter then, internet fundraising to date has not been very profitable. Indeed, I myself have maintained a homepage for a small nonprofit for the past year. Though the page receives about 50 visitors every day, and has done so for some time, the organization has yet to receive its first inquiry from a potential donee.

But this is not to say that there have been no success stories. For example, the Sierra Club has set aside a section of its homepage to allow users to make charitable pledges online. During the first 6 months the online pledge form was available, 320 people made such pledges. Hewitt and Johnston Consultants, Fundraising and the Internet: Another Arrow in the Quiver, Professional Fundraising, Sept. 1995, available online at http://www.fund- raising.com/intfundart.html.

17. Though many companies are offering buy-on-line services, the Internet is still a somewhat insecure medium through which to transfer confidential information such as credit card numbers. However, new technology is changing that. On October 23, 1995, the Mark Twain Bank of St. Louis, Missouri became the first bank in the world to offer accounts the funds from which can be used as electronic cash, or "ecash" on the Internet. DigiCash, Press Release: First Bank to Launch Electronic Cash, Oct. 23, 1995. With an ecash account, an internet user can pay for products or services online simply by sending electronic "coins" to participating merchants. Though it will probably take some time for ecash to become commonplace, the technology represents one of many efforts to make the Internet a safe place to transact business. For a technical discussion of ecash and similar technologies, see David Chaum, Achieving Electronic Privacy, Scientific American, Aug. 1992, at 96-101.

Another such effort is being pioneered by a company called "First Virtual." A user opens an "account" with First Virtual by providing that company with his credit card number. In return, First Virtual gives the user an account number. When the user happens on an internet merchant with whom he would like to do business, he simply places an order online and provides the merchant with his First Virtual account number. The merchant then requests payment from First Virtual, and First Virtual verifies the request with the owner of the account. When the account owner consents to the purchase, First Virtual pays the merchant and bills the user's credit card. As with ecash, at no time during the transaction is the user's confidential financial information transmitted over insecure channels.

Nonprofits have already begun to feel the impact of electronic money. ReliefNet, a nonprofit organization which maintains an online donation form through which users may donate to any of a list of charitable organizations, has begun accepting pledges made through First Virtual. For more information, see http://www.reliefnet.org.

18. Of course, in the end the Internet is simply a new method of communication -- arguably more efficient than phone, fax, or mail -- but communication still, and nothing more. It is thus no surprise that general organizational activities such as offering products for sale and requesting charitable donations are carried out on the Internet in basically the same fashion as in the real world.

19. See supra note 16.

20. A "homepage" (or "webpage") is simply a document placed on a machine linked to the Internet which others with basic internet software can read. Homepages are generally written in Hypertext Markup Language (HTML), a relatively simple markup language. The power of hypertext is in its ability to reference documents on any other machine on a given network: by employing hypertext in a document placed on a computer connected to the Internet, that document can be retrieved by anyone else on the Internet simply by following a "link" to that document.

Once a page is written and placed on a given computer, it is a simple matter to have that page added to any of a number of searchable databases which others on the Internet can access. Indeed, a page may be published without any effort on the author's behalf: various organizations have begun to employ "robot" computer programs which, when executed, begin to roam the Internet in search of new links. These robots are capable of cataloging the contents of the documents they find, and entering them into the major searchable databases. It is from one of these robots that the searchable "WebCrawler" database takes its name.

21. In addition to the use of homepages, there are other methods of reaching a broad audience. Though for simplicity's sake this Note concentrates solely on the use of the homepage as solicitation medium, two other methods of internet communication deserve brief mention here.

One of the more popular forms of internet communication is the USENET news system. USENET (for "Users Network") is a collection of discussion forums organized by subject matter, called "newsgroups." At this writing there are roughly 15,000 separate newsgroups, and the list is growing at a rate of 1,000 per month. Typically, a user will follow only a handful of groups at any one time, depending on his or her interests. To participate, the user simply writes a message and then "posts" it (a simple process) to the group, where it will automatically be carried to news servers around the globe, and read by everyone else participating in the group.

Grasping the potential for USENET as a means of communicating with a very large audience, numerous misguided internet users have tried to post messages to all 15,000 groups at the same time. The process has been termed "spamming" (a derogatory term) by the internet community at large, and the behavior is not appreciated: by "spamming," a person wastes not only the time of those users who receive the unwanted posts in forums to which the posting is irrelevant, but also (and more importantly) wastes a tremendous amount of internet resources by having the unwanted message reproduced thousands of times. As a result, "spammers" sometimes receive harsh retaliation by the more experienced internet users, who are able to write simple programs which (for example) send millions of copies of the same message to the spammer's e- mail account, wreaking great havoc with the recipient's computer. In short, internet fundraising through spamming is not recommended.

A similar approach to internet fundraising is more closely related to the traditional mass mail campaign. With a simple email account and a little know-how, an internet user may procure lists of thousands of different email addresses, and blindly send a message to each one. Email, like USENET, offers the potential to reach a virtually unlimited number of internet users, and at very little effort and almost no cost. However, like spamming, the internet junk-mail campaign is frowned upon by the internet community. In response to an organization's advertisement of junk- mail services, a reader of the soc.org.nonprofit newsgroup had this to say:

Newsgroups: soc.org.nonprofit
Subject: Re: *** Year around fund raising program using the Internet ***
From: [omitted]
Date: 18 Dec 1995 13:42:20 GMT
In <4b2kb2$kus@bud.shadow.net>, [omitted] (FP) writes:

>OuterNetwork Internet Services has developed a program to help nonprofit and
>charitable organizations raise funds. This program is designed to help
>organizations raise money year around for their activities. The potential is
>quite limitless, since it deals with the Internet.

Not to impugn these folks, but as a general warning: If anyone even suggests an internet junk-mail campaign, whether by newsgroup
posting or direct e-mail, run (don't walk!) in the opposite direction.

Many Internet users have now adopted a policy of boycotting organizations and companies which are perceived as abusing the Internet. And the net is a better vehicle for informal "these folks are Bad Guys" communications than for fundraising and marketing pitches.

The risk ain't worth it.

22. "Officials in Pennsylvania, New York, Connecticut and Massachusetts are in agreement that Internet fund-raising communications are covered by their statutes' solicitation definitions and registration requirements." Betsy Hills Bush, Internet Solicitation: Registration Required, The NonProfit Times, July 1995, at 26.

23. Statute of Charitable Uses, 43 Eliz., ch.4 (1601).

24. Harris et al., supra note 3, at 577.

25. 444 U.S. 620 (1980).

26. 467 U.S. 947 (1984).

27. 108 S. Ct 2667 (1988).

28. Notable pre-Schaumburg cases recognizing First Amendment protection for charitable speech include Lovell v. Griffin, 303 U.S. 444 (1938) (distribution of a religious pamphlet), Schneider v. State, 308 U.S. 147 (1939)(Jehovah's Witness pamphleting and soliciting) and Martin v. Struthers, 319 U.S. 141 (1943) (Jehovah's Witness merely pamphleting).

29. 444 U.S., at 623-25.

30. 444 U.S., at 632.

31. 444 U.S., at 637.

32. "Overbreadth" analysis relies on the principle that "[a] governmental purpose to control or prevent activities constitutionally subject to state regulation may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms." Harris, et al., supra note 3, at 615 n.291, quoting NAACP v. Alabama, 377 U.S. 288, 307 (1964). For this reason, when a statute is challenged as overbroad, it will be invalidated unless there is no set of circumstances to which its application would be unconstitutional. Id.

33. 444 U.S., at 636.

34. 467 U.S. 947 (1984).

35. 467 U.S., at 952.

36. 467 U.S., at 967-68.

37. Id.

38. Dissenting from Riley, Chief Justice Rehnquist observed that the Maryland law struck down in Munson had been enacted in response to the Schaumburg decision, and that the North Carolina law struck down in Riley had in fact been drafted in response to Munson. 108 S. Ct, at 2682 (Rehnquist, C.J., dissenting). As one observer put it: "In [Riley], the Court extended the striking of fund-raising cost limits to include a statute that required charities to disclose fund- raising costs at the time of solicitation. The Court's failure to develop a balanced conceptual framework to regulate charitable fund-raising has resulted in an unacceptable trade-off of regulatory goals that undermines al interests concerned. Charities with high fund-raising costs should not be prohibited from soliciting contributions. However, donors should not be prohibited from demanding, through legislation, the disclosure of fund-raising information." Leslie G. Espinoza, Straining the Quality of Mercy: Abandoning the Quest for Informed Charitable Giving, 64 So.Cal.L.Rev. 605, 607 (1991).

39. 108 S. Ct 2667 (1988).

40. Whether a given fee was reasonable as a proportion of the money solicited depended upon the nature of the solicitation: under the Act, fees up to 20% were always reasonable, fees between 20% and 35% were reasonable only when the solicitation involved the "dissemination of information, discussion, or advocacy relating to public issues," and fees in excess of 35% were presumptively unreasonable in all cases. However, this presumption could be rebutted by a showing that the amount of the fee was necessary either because of the dissemination of information as directed by the charity, or because the ability of the organization to raise money or communicate ideas to the public would be "significantly diminished." 108 S. Ct, at 2671.

41. 108 S. Ct, at 2670.

42. In each of the three cases, without explicitly saying so the Court invoked strict scrutiny in invalidating the statutes. See Harris, et al., supra note 3, at 614. Strict scrutiny requires both that the government's interest be "compelling" and that it use the "least restrictive means" in protecting that interest. Strict scrutiny is the most demanding of interpretive standards. Id.

43. 108 S. Ct, at 2675.

44. 108 S. Ct, at 2681.

45. 108 S.Ct, at 2679.

46. Bruce Hopkins, Charitable Solicitation Acts and Fund Raising: Some Proposals for Relief (Part 7), 58 Fund. Raising Mgmt, May 1, 1992. ("Disclosure is the order of the day."); see also State Attorneys General, supra note 3 and accompanying text.

47. "Further [the States] may constitutionally require fundraisers to disclose certain financial information to the State. . . . If this is not the most efficient means of preventing fraud, we reaffirm simply and emphatically that the First Amendment does not permit the State to sacrifice speech for efficiency." 108 S. Ct, at 2676 (citing Munson and Schaumburg).

48. Fishman & Schwarz, supra note 1, at 304, citing Harris et al., supra note 3, at 61.

49. Of course, the true extent of these burdens is somewhat controversial. By "relatively insignificant" I do not mean to suggest that the burdens are trivial, but rather that the burden only falls on the largest organizations, and is relatively minor when compared to the effect those burdens would have on the larger organizations' smaller brethren if they too were subject to such regulation.

50. See supra note 45 and accompanying text.

51. Thomas G. Krattenmaker & L.A. Powe, Jr., Converging First Amendment Principles for Converging Communications Media, 104 Yale L.J. 1719, 1721 (1995) quoting City of Los Angeles v. Preferred Communications, Inc., 476 U.S. 488, 496 (1986)(Blackmun, J., concurring). The authors continue:

Should everything we knew about regulation of books have been discarded once talking motion pictures were invented? Did discovery of the personal computer (or was it the monitor screen?) render obsolete everything the courts said about the First Amendment and broadcasting, or cable, or telephones? Once a free speech jurisprudence is written for computers, must we refuse to employ those rules for a later technology, such as satellites, lest we treat different communications media identically for First Amendment purposes?

Krattenmaker & Powe, supra, at 1721.

52. Laurence H. Tribe, The Constitution in Cyberspace: Law and Liberty Beyond the Electronic Frontier, Keynote Address at the First Conference on Computers, Freedom & Privacy, March 26, 1991 (copy on file with the author).

53. Lawrence Lessig, The Path of Cyberlaw, 104 Yale L.J. 1743, 1743 (1995) (citing Bruce A. Ackerman, Private Property and the Constitution 10-15 (1977).

54. Krattenmaker and Powe, supra note 51, at 1721.

55. Of course, for all its visceral appeal, the sentiment is not good law. At least since the case of Red Lion Broadcasting v. FCC, 395 U.S. 367 (1969), there have been not one but two models of First Amendment jurisprudence: "print" and "broadcast." For the purposes of this Note I will simply note that the "print" model is the older and more traditional of the two, taking a more or less libertarian view of the guarantee of freedom of speech, while the "broadcast" model is a more recent construct, designed to assure that those without the means to communicate effectively are provided with those means -- a roughly more egalitarian approach to the Amendment. For a more detailed discussion of these competing models in the context of the new communications technology, see Krattenmaker and Powe, supra note 51.

56. Los Angeles v. Preferred Communication, Inc., 476 U.S. 488, 496 (1986) (Blackmun, J., concurring).

57. 74 F.3d 701 (6th Cir. 1996).

58. The postal inspector was working closely with an assistant U.S. Attorney in Memphis. Mike Godwin, Virtual Community Standards: BBS Obscenity Case Raises New Legal Issues, San Francisco Examiner, [date and page unknown].

59. The charge included six counts under 18 U.S.C. § 1465 of "knowingly using and causing to be used a facility and means of interstate commerce -- a combined computer/telephone system -- for the purpose of transporting obscene, computer-generated materials in interstate commerce." 74 F.3d, at 705-06.

60. Godwin, supra note 58.

61. 74 F.3d, at 709.

62. This observer finds little reason to suppose it won't. The opinion is rather straightforward, and rational.

63. It must be noted, however, that there is presently a controversy over whether a recent Supreme Court decision will render the application of state charitable solicitation laws to foreign charities problematic. In Quill Corp. v. North Dakota, 112 S. Ct 1904 (1992), the Supreme Court held that North Dakota was prohibited by the Commerce Clause from enforcing a use tax against Quill, a foreign corporation conducting mail-order business within the state from a foreign location. For our purposes, the ultimate resolution of this issue is not critical: if Quill has indeed wrought major change in minimum contacts analysis in the charitable solicitation context, such change should affect communications by mail, phone, and modem in like fashion.

64. N.Y. Exec. Law § 171-a(10) (McKinney 1921 Supp. 1995).

65. Ariz. Rev. Stat. Ann. § 44-6551(5) (1995).

66. Ark. Code Ann. § 4-28-402(5) (1995).

67. Cal. Bus. & Prof. Code §§ 17510.2, 17510.2(1) (West 1995).

68. Mass. Gen. Laws Ann. ch. 68 § 16 (West 1995).

69. See supra note 53 and accompanying text.

70. A "listserv" is basically a USENET newsgroup where, instead of posting to worldwide bulletin boards, articles are emailed directly to listserv subscribers. In some sense, then, the listserv is a sort of semi-private newsgroup.

71. For background information on the listserv and instructions on how to participate, see http://www.bway.net/~hbograd/cyb-acc.html.

72. Email correspondence from Harriet Bograd to Paul Monaghan, Dec. 20, 1995 and Dec. 22, 1995. (copies on file with the author).

73. http://www.qut.edu.au/bus/ponc/ponc5.html#utopia [hereinafter "Utopia"].

74. Utopia, supra note 73.

75. Christoph Brocks, email correspondence to Paul Monaghan, Mar. 12, 1996. (on file with the author).

76. Id.

77. See supra note 4 and accompanying text.

78. Lawrence H. Tribe, American Constitutional Law 1007 (2d ed. 1988).

79. Of course, many states already have provisions exempting the smaller organizations from certain filing requirements. However, as with the law in this area generally, these exemptions were adopted at a time when the costs of multistate fundraising were higher for the small organizations than they are today. Accordingly, those states with older exemption provisions arguably no longer sufficiently respect the smaller organization's protected First Amendment right to solicit donations.

80. See, e.g., Bush, supra note 22, at 26 ("The Internet's low costs allow smaller organizations to use it as a means of getting attention, but this leave the door open to unscrupulous operators.")(quoting Bennett Weiner of the Philanthropic Advisory Service of the Council of Better Business Bureaus).

81. For a summary of some of the more notable proposals, see Fishman & Schwarz, supra note 1, at 312-16.

82. See supra note 5.

83. Id..

84. Email correspondence from Myles McGregor-Lowndes to Paul Monaghan, Dec. 21, 1995 (copy on file with the author).

All participants in the study group must always follow the BSL Honor Code.

Do It Yourself

Legal Documents

Law School Site

Charitable Solicitation Over the Internet

and

State-Law Restrictions

Table of Contents