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STATE FUNDRAISING REGULATIONprinciples of ethics. For example, in one state, charities that solicit charitablegifts and their professional fundraisers and solicitors are “fiduciaries.” This is arole historically confined to trustees of charitable trusts and more recently todirectors of charitable corporations.§ 24.3 STATES’ POLICE POWERPrior to a fuller analysis of state law regulation in this field, it is necessary tobriefly reference the underlying legal basis for this body of law: the police power.Each state (and local unit of government) inherently possesses the policepower. This power enables a state or other political subdivision of governmentto regulate—within the bounds of constitutional law principles (see below)—the conduct of its citizens and others, so as to protect the safety, health, andwelfare of its citizens.Generally, it is clear that a state can enact and enforce, in the exercise of itspolice power, a charitable solicitation act that requires a charity planning onfundraising in the jurisdiction to first register with (or secure a license or permitfrom) the appropriate regulatory authorities and subsequently to file periodicreports about the results of the solicitation. There is nothing inherently unlawfulabout this type of requirement. It may also mandate professional fundraisersand professional solicitors to register and report, or empower the regulatoryauthorities to investigate the activities of charitable organizations in the presenceof reasonable cause to do so, and impose injunctive remedies, fines, andimprisonment for violation of the statute. It appears clear that a state can regulatecharitable fundraising notwithstanding the fact that the solicitation utilizesthe federal postal system, uses television and radio broadcasts, or otherwiseoccurs in interstate commerce. The rationale is that charitable solicitations maybe reasonably regulated to protect the public from deceit, fraud, or the unscrupulousobtaining of money under a pretense that the money is being collectedand expended for a charitable purpose.Despite the inherent police power lodged in the states (and local jurisdictions)to regulate the charitable solicitation process, and the general scope of thepower, principles of law operate to confine its reach. Most of these principles arebased on constitutional law precepts, such as freedom of speech, procedural andsubstantive due process, and equal protection of the laws, as well as the standardsusually imposed by statutory law, which bar the exercise of the policepower in a manner that is arbitrary.§ 24.4 BASIC DEFINITIONSState law regulation of this nature pertains to fundraising for charitable purposes.The use of the term charitable in this setting refers to a range of activitiesand organizations that is much broader than that embraced by the term as usedin the federal tax context. That is, while the term includes organizations that arecharitable, educational, scientific, and religious, as those terms are used for federaltax law purposes, it also includes (absent specific exemption) organizationsthat are civic, social welfare, recreational, and fraternal. Indeed, the generaldefinition is so encompassing as to cause some of these statutes to expressly 630