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solicitation statutes further prohibited or restricted charitable
organizations from soliciting contributions, unless a prescribed
minimum percentage of the proceeds raised would be expended in
the charitable organization’s charitable program, thereby
limiting the percentage of the proceeds to be used by the
charitable organization to pay fundraising expenses.6
The Council of Better Business Bureaus (hereinafter
sometimes referred to as the CBBB) and the National Charities
Information Bureau (hereinafter sometimes referred to as the
NCIB) established certain guidelines for organizations that
solicit charitable contributions from the public. The objectives
of the CBBB as to these matters are to (1) encourage self-
regulation of charities and (2) assist potential donors by
helping them to make better-informed gift-giving decisions. The
objective of the NCIB is to promote informed giving by providing
to the public information that will help potential donors to
evaluate charities. The CBBB is exempt under section 501(c)(6)
as a business league; its activities in the charitable area are
conducted by a division called the Philanthropic Advisory
6 Ultimately, the United States Supreme Court held
unconstitutional, on First Amendment grounds, several State
charitable solicitation statutes that limited the amount or
percentage of the proceeds raised that could be expended by
charitable organizations to pay fundraising expenses. See Riley
v. National Federation of Blind, 487 U.S. 781 (1988); Secretary
of State of Md. v. J.H. Munson Co., 467 U.S. 947 (1984);
Schaumburg v. Citizens for Better Environ., 444 U.S. 620 (1980);
see also, United Cancer Council, Inc. v. Commissioner, 100 T.C.
at 174-177.
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