The settlement was reached after an investigation by the Attorney General concluded that much of the roughly $8 million in contributions received by Noah’s Wish in response to its solicitations after Hurricane Katrina had not been spent to help animals affected by the Katrina disaster. Under the settlement agreement, Noah’s Wish also agrees to increase its number of board members, provide governance training to its board, pay the Attorney General’s investigative fees and costs, and not to employ its founder and former president and board member, Terri Crisp, in any manner. Under the agreement, Crisp agrees that she will never again serve Noah’s Wish in any capacity and will not serve as an officer, director, or trustee of any charity for a period of five years.

The agreement resolves an investigation initiated in 2002 by the Attorney General’s charitable trust section into allegations of improper handling of disaster relief funds for victims of the 2001 Alpine-Viejas Fire.

The investigation found that ARC and its San Diego and Imperial Counties Chapter (SDIC) used misleading solicitation practices to generate donations in the wake of the fire that were not earmarked for the fire disaster relief. The investigation also found that ARC’s policies and procedures governing executive compensation were wholly inadequate and provided virtually no national oversight of local chapters and former SDIC CEO Dodie Rotherman was substantially overpaid during fiscal years 1997-2001.

After presenting the investigation’s findings to ARC and SDIC officials, ARC agreed to distribute roughly $55,000 to Alpine-Viejas fire victims. ARC also now requires greater oversight of initiative pay, merit salary adjustments and bonuses of executives in California and is applying the new procedures nationwide.

The Attorney General filed a civil complaint against Sensory Integration and other defendants, including various current and former officers and directors, seeking damages, civil penalties, restitution, an accounting, appointment of a receiver, and involuntary dissolution of the charity. The complaint also sought an injunction preventing the defendants from controlling the assets of Sensory Integration and from conducting any business on its behalf, including charitable solicitations.

On June 22, 2007, the Attorney General obtained a preliminary injunction prohibiting, throughout the United States, the conduct of any business activities regarding Sensory Integration and further prohibiting the exercise of control over any of the charity’s assets.

On January 1, 2007, a new California law (AB 839)  [PDF 58 kb / 4 pg] passed allowing eligible nonprofit organizations to hold "charity poker night" fundraisers. Nonprofit organizations and suppliers of equipment and/or services for such fundraising events must submit an application for registration to the Bureau of Gambling Control for approval.

Controlled games which are an approved funding mechanism for these fundraisers are specified in the California Penal Code section 337j(e)(1) as “any poker or pai gow game, and any other game played with cards or tiles, or both, and approved by the Bureau of Gambling Control, and any game of chance, including any gaming device, played for currency, check, credit, or any other thing of value that is not prohibited and made unlawful by statute or local ordinance.”

A detailed listing of provisions outlined in AB 839  [PDF 28 kb / 1 pg] can be found at: Charitable Gambling Fundraisers At-A-Glance.

Nonprofit organizations must register with the Bureau to host one event per calendar year. In addition to nonprofit organizations, businesses that supply equipment and services for fundraising events will be required to register annually with the Bureau. A business that supplies equipment and/or services to an event must register annually.

No one under the age of 21 is allowed to participate at these fundraising events. Nonprofit organizations are required to post problem gambling information at each fundraising event.

The new law does not allow the use of slot machines or Internet gaming for fundraising purposes. Other fundraising restrictions apply to charity bingo and raffle events. The Attorney General’s Charitable Trust Section regulates raffles (Raffles - Charitable Trusts - California Dept. of Justice - Office of the Attorney General). Nonprofit Organizations must register with the Attorney General’s Registry of Charitable Trusts prior to conducting a raffle and file financial disclosure reports on each raffle event. Please contact your local city, sheriff, or police department for inquiries regarding bingo.

Bureau staff work directly with the Franchise Tax Board to assist in providing required documents to determine tax exemption. A process has been implemented which allows nonprofit organizations to obtain written documentation necessary to process applications in a very minimal waiting period.

During the 2007* calendar year, the Bureau of Gambling Control has monitored and tracked all applications received by the Charitable Gambling Program. Based on the research of both Nonprofit Organizations and Gambling Equipment/Service Suppliers the total number of applications received for Nonprofit Organizations in 2007 was 322 and the total for Gambling Equipment/Service Providers was 90 as shown in the chart above.

As shown in the chart below, 59% percent of the Gambling Equipment/Service Suppliers are located in Southern California, 28% percent in Northern California, 2% percent in Central California, and 1% percent out of other locations