Court Upholds Florida’s Registration of Fund-Raising Consultants

In a case watched nationally, a federal court has upheld a Florida county’s law that requires charities and their fund-raising professionals to register when the charities seek donations in the county.

A federal district judge in Tampa rejected arguments from a coalition of national charities and fund-raising consultants that Pinellas County’s charitable-solicitations ordinance duplicates state regulations and unconstitutionally restrains commerce and stifles free speech. The coalition, American Charities for Reasonable Fundraising Regulation, was formed to oppose laws around the country that its supporters believe to be unreasonably onerous and restrictive. In recent years, a growing number of cities and counties have enacted ordinances to crack down on what they perceive as a wave of fraudulent and misleading charity fund raising.

Pinellas County, which includes St. Petersburg, regulates solicitations within its borders by requiring that both charities and fund-raising professionals register annually and report details of their finances, clients, officers, and fund-raising materials. Charities also pay fees each year.

The five-year-old ordinance covers all charitable solicitation within the county, whether done in person, at a special event, or by mail, telephone, television or radio broadcast, or by using the Internet. Where the request originates, whether next door or across the country, has no bearing on the law.

The coalition charged that the Pinellas ordinance “constitutes an overbroad, unreasonable restriction of free-speech activity and of free trade and commerce.” The group noted that the ordinance covers even consultants in distant states who have no operations in Pinellas County, who may never have heard of the ordinance, and who may never know all the places their message ultimately appears.

What’s more, the coalition said that because all charities that solicit in Florida must provide the state with information “substantially similar” to that required by Pinellas County, the ordinance merely duplicates protections already provided by state law.

But U.S. District Judge Elizabeth A. Kovachevich rejected all the coalition’s arguments, saying that the ordinance passed constitutional tests. For example, the judge said that the ordinance met a U.S. Supreme Court test that a government may impose regulations if they are “narrowly tailored” to prevent fraud and protect charities and the public.

Ms. Kovachevich also rejected the coalition’s assertion that the ordinance’s burden on professional fund raisers was “clearly excessive” in relation to the benefits to the county. The coalition’s “main contention here posits that if other local jurisdictions instituted similar ordinances, the costs, both financially and administratively, would severely outweigh the county’s legitimate local interest,” the judge wrote. But she said that the coalition’s members “merely hypothesize about the burden they may incur if other localities enacted a similar ordinance,” without providing relevant evidence of a current burden to “outweigh the substantial local benefit” that the ordinance gives the county.

Ed Mazlish, a lawyer for American Charities for Reasonable Fundraising Regulation, said that the coalition will ask the judge to reconsider her ruling. “We believe that she fundamentally misunderstood some of the issues that were presented to her,” Mr. Mazlish said. “She confused the definitions of consultants and solicitors and justified regulation of consultants based on the activities engaged in by solicitors.”