California's new legislation will require greater transparency for nonprofits in their fundraising efforts; this arose out of recent litigation against nonprofits for misuse of funds.
"New legislation enacted in California will clarify regulations surrounding fundraising counsel as well as custody or control of funds, among other definitions related to charities.
"A.B. 556 was signed into law yesterday by Gov. Jerry Brown after unanimously sailing through the Senate and Assembly this summer. It will take effect Jan. 1, 2016.
"The measure will clarify “custody or control of funds” and defines “caging companies,” according to the Direct Marketing Association Nonprofit Federation (DMANF). The bill also prohibits fundraising counsel from being compensated by a percentage of donations received, which is generally a best practice for fundraisers but was not part of the law in California. It also expands the existing 10-year statute of limitations for charitable enforcement cases to include for-profit fundraising firms and other third parties."--Mark Hrywna, The NonProfit Times