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Charitable Fraud Enhanced Enforcement Measures

Jul 6, 2016

We’re proud that HB 16-1129 to enhance penalties against charitable fraud was signed by Governor Hickenlooper! Thanks to the Colorado Attorney General for partnering with us and to Reps. Polly Lawrence (R-Roxborough Park) and Beth McCann (D-Denver) and Sens. Larry Crowder (R-Alamosa) and Rollie Heath (D-Boulder) for sponsoring the bill.

1129 strengthens the Colorado Attorney General’s ability to enforce Colorado’s laws against charitable fraud and deceptive solicitations. In doing so, the bill ensures nonprofits exercise due diligence when working with paid solicitors and helps deter bad actors from committing charitable fraud. 1129 amends the Colorado Charitable Solicitations Act (CCSA) and Consumer Protection Act (CCPA) as follows

  • Enhances civil penalties imposed by a court for knowing violations of CCSA. 
    • 1129 increases the maximum penalty from $2,000 to $10,000 per violation
    • 1129 increases the cap to $3 million for a series of related violations. This cap will be adjusted for inflation annually
  • Holds a nonprofit liable if it knows or should have known that a paid solicitor committed charitable fraud while under contract. 
  • Paid solicitors must provide a statement indicating compliance with state conflict of interest law if they serve on the board, direct operations, or have a financial interest in the charity.
  • Exempts any person from registration who provides any service or product to a nonprofit but does not directly solicit contributions.
  • Requires a paid solicitor to obtain a surety bond or have a CD with a minimum value of $15,000.
  • Charitable fraud now includes instances where membership organizations of police, firefighters, first responders or veterans misrepresents significant paid membership numbers.

Colorado Nonprofit Association supports strong enforcement of Colorado’s laws against those found to have committed charitable fraud by a court of law. Our laws should deter those who consider committing fraud. These changes will give the Colorado Attorney General the ability to enforce Colorado’s laws more vigorously against charitable fraud and deceptive solicitations. By rooting out charitable fraud, Colorado’s donors can be assured that they can trust the charities that ask them to give.

Click here to view an update from the Secretary of State regarding new requirements for paid solicitors.