N.Y. Executive Law § 173-a: Contracts of professional fund raisers, fund raising counsel and commercial co-venturers; closing statements; final accountings

§ 173-a. Contracts of professional fund raisers, fund raising counsel

and commercial co-venturers; closing statements; final accountings. 1.

No person shall act as a professional fund raiser, fund raising counsel

or commercial co-venturer before he has a written contract with the

charitable organization or other person benefitting from his services. A

professional fund raiser or fund raising counsel shall within ten days

after its execution by the parties thereto file with the attorney

general a copy of each contract entered into between such professional

fund raiser or fund raising counsel and a charitable organization

required to be registered pursuant to this article, certified under

penalties for perjury by said professional fund raiser or fund raising

counsel to be a true and correct copy of such contract. When the

services to be performed under such contracts include the oral

solicitation of funds from the public, such oral presentations shall be

deemed to be part of the contract and shall be reduced to a writing

which in the case of a professional fund raiser shall be filed with the

attorney general by the registrant at the time such contracts are filed.

If there is any change in the presentation filed with the attorney

general, the registrant shall notify the attorney general in writing

within five days of such change. No services shall be performed under

such a contract until the professional fund-raiser shall have received

an acknowledgement from the attorney general of the receipt of a copy of

such contract or such contract shall have been on file with the attorney

general for at least fifteen days, whichever is shorter. Provided,

however, that no services shall be performed pursuant to such contract

if, within fifteen days of filing, the attorney general has notified the

professional fund raiser or fund raising counsel and the charitable

organization of any deficiencies in the contract and/or the registration

and filing under this article. True and correct copies of such contracts

shall be kept on file in the offices of the charitable organization and

the professional fund raiser, fund raising counsel or commercial

co-venturer during the term thereof and until the expiration of a period

of three years subsequent to the date the solicitation of contributions

provided for therein actually terminates. Within ninety days after the

termination of any such contract, the professional fund raiser shall

file with the attorney general a closing statement, signed under

penalties for perjury by all parties to the contract on forms prescribed

by the attorney general. Such statement shall disclose gross revenue,

all expenditures incurred in the performance of the contract, and all

funds paid to the professional fund raiser and charitable organization.

In the event that a contract term is longer than a one year period, the

professional fund raiser shall file an interim statement, at least

annually. No person shall act as a sub-contractor on behalf of another

professional fund raiser prior to obtaining a written contract with such

professional fund raiser and written consent from the charity on whose

behalf fundraising activities are to be conducted pursuant to such

contract, and such written consent shall have been attached to such

contract and filed with the attorney general pursuant to subdivision one

of this section. Willful violation of this section shall be a

misdemeanor.

2. Every contract between a professional fund raiser and a charitable

organization shall contain or shall be deemed to contain a provision

that within five days of receipt by the professional fund raiser or any

other person the gross revenue received from any solicitation shall be

deposited in a bank account under the exclusive control of the charity.

3. Within ninety days after the termination of a sales promotion

advertised to benefit a charitable organization, a commercial

co-venturer shall provide such organization with an accounting stating

the number of items sold, the dollar amount of each sale and the amount

paid or to be paid to the charitable organization. In the event that any

such sales promotion is longer than a one year period, the commercial

co-venturer shall provide the charitable organization with an interim

report, at least annually.

4. A charitable organization which enters into a contract with a

commercial co-venturer shall file with the attorney general on the date

that the next financial report is due to be filed the following

information on forms prescribed by the attorney general and signed under

penalties for perjury by an officer: (a) a list of the names and

addresses of all commercial co-venturers authorized by the charitable

organization to use its name during the year covered by that financial

report and, if known, during the year following the year covered by the

financial report, (b) a statement of the financial terms and any

conditions of each co-venture contract, and (c) a statement whether each

commercial co-venturer has provided the charitable organization with an

accounting as prescribed by subdivision three of this section.