The North Carolina Charitable Solicitations Act defines the
prima facie "reasonable fee" that a professional
fundraiser may charge according to a three-tiered schedule. A fee
up to 20% of receipts collected is deemed reasonable. A fee between
20% and 35% is deemed unreasonable upon a showing that the
solicitation at issue did not involve the
"dissemination of information, discussion, or advocacy relating
to public issues as directed by the [charitable organization] which
is to benefit from the solicitation."
A fee exceeding 35% is presumed unreasonable, but the fundraiser
may rebut the presumption by showing that the fee was necessary
either because the solicitation involved the dissemination of
information or advocacy on public issues directed by the charity,
or because otherwise the charity's ability to raise money or
communicate would be significantly diminished. The Act also
provides that a professional fundraiser must disclose to potential
donors the average percentage of gross receipts actually turned
over to charities by the fundraiser for all charitable
solicitations conducted in the State within the previous 12 months.
Finally, the Act provides that professional fundraisers may not
solicit without an approved license, whereas volunteer fundraisers
may solicit immediately upon submitting a license application.
Appellees, a coalition of professional fundraisers, charitable
organizations, and potential donors, brought suit against appellant
government officials charged with the enforcement of the Act
(hereinafter collectively referred to as North Carolina or the
State), seeking injunctive and declaratory relief. The District
Court ruled that the challenged provisions on their face
unconstitutionally infringed upon freedom of speech, and enjoined
their enforcement. The Court of Appeals affirmed.
Held:
1. North Carolina's three-tiered definition of "reasonable fees"
unconstitutionally infringes upon freedom of speech. The
solicitation of charitable contributions is protected speech, and
using percentages to decide the legality of the fundraiser's fee is
not narrowly tailored to the State's
Page 487 U. S. 782
interest in preventing fraud.
Schaumburg v. Citizens for a
Better Environment, 444 U. S. 620;
Secretary of State of Maryland v. Joseph H. Munson Co.,
467 U. S. 947.
North Carolina cannot meaningfully distinguish its statute from
those previously held invalid on the ground that it has a
motivating interest, not present in the prior cases, to ensure that
the maximum amount of funds reach the charity, or to guarantee that
the fee charged charities is not unreasonable. This provision is
not merely an economic regulation, with no First Amendment
implication, to be tested only for rationality; instead, the
regulation must be considered as one burdening speech. The State's
asserted justification that charities' speech must be regulated for
their own benefit is unsound. The First Amendment mandates the
presumption that speakers, not the government, know best both what
they want to say and how to say it. Also unavailing is the State's
contention that the Act's flexibility more narrowly tailors it to
the State's asserted interests than the laws invalidated in the
prior cases. The State's asserted additional interests are both
constitutionally invalid and insufficiently related to a
percentage-based test. And while a State's interest in protecting
charities and the public from fraud is a sufficiently substantial
interest to justify a narrowly tailored regulation, the North
Carolina statute, even with its flexibility, is not sufficiently
tailored to such interest. Pp.
487 U. S.
787-795.
2. North Carolina's requirement that professional fundraisers
disclose to potential donors, before an appeal for funds, the
percentage of charitable contributions collected during the
previous 12 months that were actually turned over to charity is
unconstitutional. This provision of the Act is a content-based
regulation because mandating speech that a speaker would not
otherwise make necessarily alters the speech's content. Even
assuming that the mandated speech, in the abstract, is merely
"commercial," it does not retain its commercial character when it
is inextricably intertwined with the otherwise fully protected
speech involved in charitable solicitations, and thus the mandated
speech is subject to the test for fully protected expression, not
the more deferential commercial speech principles. Nor is a
deferential test to be applied on the theory that the First
Amendment interest in compelled speech is different than the
interest in compelled silence. The difference is without
constitutional significance, for the First Amendment guarantees
"freedom of speech," a term necessarily comprising the decision of
both what to say and what not to say. Moreover, for First Amendment
purposes, a distinction cannot be drawn between compelled
statements of opinion and, as here, compelled statements of "fact,"
since either form of compulsion burdens protected speech. Thus,
North Carolina's content-based regulation is subject to exacting
First Amendment scrutiny. The State's interest in informing donors
how the money they contribute is spent to
Page 487 U. S. 783
dispel the alleged misperception that the money they give to
professional fundraisers goes in greater-than-actual proportion to
benefit charity, is not sufficiently weighty, and the means chosen
to accomplish it are unduly burdensome, and not narrowly tailored.
Pp.
487 U. S.
795-801.
3. North Carolina's licensing requirement for professional
fundraisers is unconstitutional. A speaker's rights are not lost
merely because compensation is received, and the State's asserted
power to license professional fundraisers carries with it (unless
properly constrained) the power directly and substantially to
affect the speech they utter. Consequently, the statute is subject
to First Amendment scrutiny. Generally, speakers need not obtain a
license to speak. Even assuming that the State's interest in
regulating those who solicit money justifies requiring fundraisers
to obtain a license before soliciting, such a regulation must
provide that the licensor will, within a specified brief period,
either issue a license or go to court. That requirement is not met
here, for the North Carolina Act permits a delay without limit. Nor
can the State assert that its history of issuing licenses quickly
constitutes a practice effectively constraining the licensor's
discretion, since such history relates to a time (prior to
amendment of the Act) when professional fundraisers were permitted
to solicit as soon as their applications were filed. Pp.
487 U. S.
801-804.
817 F.2d 102, affirmed.
BRENNAN, J., delivered the opinion of the Court, in which WHITE,
MARSHALL, BLACKMUN, and KENNEDY, JJ., joined, in Parts I, II, and
III, of which STEVENS, J., joined, and in all but n. 11 of which
SCALIA, J., joined. SCALIA, J., filed an opinion concurring in part
and concurring in the judgment,
post, p.
487 U. S. 803.
STEVENS, J., filed an opinion concurring in part and dissenting in
part,
post, p.
487 U. S. 804.
REHNQUIST, C.J., filed a dissenting opinion, in which O'CONNOR, J.,
joined,
post, p.
487 U. S.
804.
Page 487 U. S. 784
JUSTICE BRENNAN delivered the opinion of the Court.
The North Carolina Charitable Solicitations Act governs the
solicitation of charitable contributions by professional
fundraisers. As relevant here, it defines the
prima facie
"reasonable fee" that a professional fundraiser may charge as a
percentage of the gross revenues solicited; requires professional
fundraisers to disclose to potential donors the gross percentage of
revenues retained in prior charitable solicitations; and requires
professional fundraisers to obtain a license before engaging in
solicitation. The United States Court of Appeals for the Fourth
Circuit held that these aspects of the Act unconstitutionally
infringed upon freedom of speech. We affirm.
I
Responding to a study showing that, in the previous five years,
the State's largest professional fundraisers had retained as fees
and costs well over 50% of the gross revenues collected in
charitable solicitation drives, North Carolina amended its
Charitable Solicitations Act in 1985. As amended, the Act prohibits
professional fundraisers from retaining an "unreasonable" or
"excessive" fee, [
Footnote 1] a
term defined by a three-tiered schedule. [
Footnote 2] A fee up to 20% of the gross
Page 487 U. S. 785
receipts collected is deemed reasonable. If the fee retained is
between 20% and 35%, the Act deems it unreasonable upon a showing
that the solicitation at issue did not involve the
"dissemination of information, discussion, or advocacy relating
to public issues as directed by the [charitable organization] which
is to benefit from the solicitation."
Finally, a fee exceeding 35% is presumed unreasonable, but the
fundraiser may rebut the presumption by showing that the amount of
the fee was necessary either (1) because the solicitation involved
the dissemination of information or advocacy on public issues
directed by the charity, or (2) because otherwise the charity's
ability to raise money or communicate would be significantly
Page 487 U. S. 786
diminished. As the State describes the Act, even where a
prima facie showing of unreasonableness has been rebutted,
the factfinder must still make an ultimate determination, on a
case-by-case basis, as to whether the fee was reasonable -- a
showing that the solicitation involved the advocacy or
dissemination of information does not alone establish that the
total fee was reasonable.
See Brief for Appellants 10-11;
Reply Brief for Appellants 2-3.
The Act also provides that, prior to any appeal for funds, a
professional fundraiser must disclose to potential donors: (1) his
or her name; (2) the name of the professional solicitor or
professional fundraising counsel by whom he or she is employed and
the name and address of his or her employer; and (3) the average
percentage of gross receipts actually turned over to charities by
the fundraiser for all charitable solicitations conducted in North
Carolina within the previous 12 months. [
Footnote 3] Only the third disclosure requirement is
challenged here.
Finally, professional fundraisers may not solicit without an
approved license. [
Footnote 4]
In contrast, volunteer fundraisers
Page 487 U. S. 787
may solicit immediately upon submitting a license application.
N.C.Gen.Stat. § 131C-4 (1986). A licensing provision had been in
effect prior to the 1985 amendments, but the prior law allowed both
professional and volunteer fundraisers to solicit as soon as a
license application was submitted.
A coalition of professional fundraisers, charitable
organizations, and potential charitable donors brought suit against
various government officials charged with the enforcement of the
Act (hereinafter collectively referred to as North Carolina or the
State), seeking injunctive and declaratory relief. The District
Court for the Eastern District of North Carolina ruled on summary
judgment that the foregoing aspects of the Act on their face
unconstitutionally infringed upon freedom of speech (it also found
the Act constitutional in other respects not before us now), and
enjoined enforcement of the unconstitutional provisions.
635 F.
Supp. 256 (1986). The Court of Appeals for the Fourth Circuit
affirmed in a per curiam opinion. 817 F.2d 102 (judgment order),
and we noted probable jurisdiction, 484 U.S. 911 (1987).
II
We turn first to the "reasonable fee" provision. In deciding
this issue, we do not write on a blank slate; the Court has
heretofore twice considered laws regulating the financial aspects
of charitable solicitations. We first examined such a law in
Schaumburg v. Citizens for a Better Environment,
444 U. S. 620
(1980). There we invalidated a local ordinance requiring charitable
solicitors to use, for charitable purposes (defined to exclude
funds used toward administrative expenses and the costs of
conducting the solicitation), 75% of the funds solicited. We began
our analysis by categorizing the type of speech at issue. The
village argued that charitable solicitation is akin to a business
proposition, and therefore constitutes merely commercial speech. We
rejected
Page 487 U. S. 788
that approach and squarely held, on the basis of considerable
precedent, that charitable solicitations "involve a variety of
speech interests . . . that are within the protection of the First
Amendment," and therefore have not been dealt with as "purely
commercial speech."
Id. at
444 U. S. 632.
Applying standard First Amendment analysis, we determined that the
ordinance was not narrowly tailored to achieve the village's
principal asserted interest: the prevention of fraud. We concluded
that some charities, especially those formed primarily to advocate,
collect, or disseminate information, would of necessity need to
expend more than 25% of the funds collected on administration or
fundraising expenses.
Id. at
444 U. S.
635-637. Yet such an eventuality would not render a
solicitation by these charities fraudulent. In short, the
prevention of fraud was only
"peripherally promoted by the 75-percent requirement, and could
be sufficiently served by measures less destructive of First
Amendment interests."
Id. at
444 U. S.
636-637. We also observed that the village was free to
enforce its already existing fraud laws, and to require charities
to file financial disclosure reports.
Id. at
444 U. S.
637-638, and nn. 11-12.
We revisited the charitable solicitation field four years later
in
Secretary of State of Maryland v. Joseph H. Munson Co.,
467 U. S. 947
(1984), a case closer to the present one in that the statute
directly regulated contracts between charities and professional
fundraisers. Specifically, the statute in question forbade such
contracts if, after allowing for a deduction of many of the costs
associated with the solicitation, the fundraiser retained more than
25% of the money collected. Although the Secretary was empowered to
waive this limitation where it would effectively prevent the
charitable organization from raising contributions, we held the law
unconstitutional under the force of
Schaumburg. We
rejected the State's argument that restraints on the relationship
between the charity and the fundraiser were mere "economic
regulations" free of First Amendment implication. Rather, we viewed
the law as "a direct restriction on the amount of
Page 487 U. S. 789
money a charity can spend on fundraising activity," and
therefore "a direct restriction on protected First Amendment
activity." 467 U.S. at
467 U. S. 967,
and n. 16. Consequently, we subjected the State's statute to
exacting First Amendment scrutiny. Again, the State asserted the
prevention of fraud as its principal interest, and again we held
that the use of a percentage-based test was not narrowly tailored
to achieve that goal. In fact, we found that, if the statute
actually prevented fraud in some cases, it would be "little more
than fortuitous." An "equally likely" result would be that the law
would
"restrict First Amendment activity that results in high costs
but is itself a part of the charity's goal, or that is simply
attributable to the fact that the charity's cause proves to be
unpopular."
Id. at
467 U. S.
966-967.
As in
Schaumburg and
Munson, we are
unpersuaded by the State's argument here that its three-tiered,
percentage-based definition of "unreasonable" passes constitutional
muster. Our prior cases teach that the solicitation of charitable
contributions is protected speech, and that using percentages to
decide the legality of the fundraiser's fee is not narrowly
tailored to the State's interest in preventing fraud. [
Footnote 5] That much established,
unless the State can meaningfully distinguish its statute from
those discussed in our precedents, its statute must fall. The State
offers two distinctions. First, it asserts a motivating interest
not expressed in
Schaumburg or
Munson: ensuring
that the maximum amount of funds reach the charity or, somewhat
relatedly, to guarantee that the fee charged charities is not
"unreasonable."
Page 487 U. S. 790
Second, the State contends that the Act's flexibility more
narrowly tailors it to the State's asserted interests than the laws
considered in our prior cases. We find both arguments
unavailing.
The State's additional interest in regulating the fairness of
the fee may rest on either of two premises (or both): (1) that
charitable organizations are economically unable to negotiate fair
or reasonable contracts without governmental assistance; or (2)
that charities are incapable of deciding for themselves the most
effective way to exercise their First Amendment rights.
Accordingly, the State claims the power to establish a single
transcendent criterion by which it can bind the charities' speaking
decisions. We reject both premises.
The first premise, notwithstanding the State's almost talismanic
reliance on the mere assertion of it, amounts to little more than a
variation of the argument rejected in
Schaumburg and
Munson that this provision is simply an economic
regulation, with no First Amendment implication, and therefore must
be tested only for rationality. We again reject that argument; this
regulation burdens speech, and must be considered accordingly.
There is no reason to believe that charities have been thwarted in
their attempts to speak, or that they consider the contracts in
which they enter to be anything less than equitable. [
Footnote 6] Even if such a showing could be
made, the State's solution stands in sharp conflict with the First
Amendment's command that government regulation of speech must be
measured in minimums, not maximums.
The State's remaining justification -- the paternalistic premise
that charities' speech must be regulated for their own benefit --
is equally unsound. The First Amendment mandates
Page 487 U. S. 791
that we presume that speakers, not the government, know best
both what they want to say and how to say it.
See Tashjian v.
Republican Party of Connecticut, 479 U.
S. 208,
479 U. S. 224
(1987) (criticizing State's asserted interest in protecting "the
Republican party from undertaking a course of conduct destructive
of its own interests," and reiterating that government "
may not
interfere [with expressions of First Amendment freedoms] on the
ground that [it] view[s] a particular expression as unwise or
irrational"') (quoting Democratic Party of United States v.
Wisconsin ex rel. La Follette, 450 U.
S. 107, 450 U. S. 124
(1981)); cf. First National Bank of Boston v. Bellotti,
435 U. S. 765,
435 U. S.
791-792, and n. 31 (1978) (criticizing State's
paternalistic interest in protecting the political process by
restricting speech by corporations); Linmark Associates, Inc.
v. Willingboro, 431 U. S. 85,
431 U. S. 97
(1977) (criticizing, in the commercial speech context, the State's
paternalistic interest in maintaining the quality of neighborhoods
by restricting speech to residents).
"The very purpose of the First Amendment is to foreclose public
authority from assuming a guardianship of the public mind through
regulating the press, speech, and religion."
Thomas v. Collins, 323 U. S. 516,
323 U. S. 545
(1945) (Jackson, J., concurring). To this end, the government, even
with the purest of motives, may not substitute its judgment as to
how best to speak for that of speakers and listeners; free and
robust debate cannot thrive if directed by the government. We
perceive no reason to engraft an exception to this settled rule for
charities.
The foregoing discussion demonstrates that the State's
additional interest cannot justify the regulation. But
alternatively, there are several legitimate reasons why a charity
might reject the State's overarching measure of a fundraising
drive's legitimacy -- the percentage of gross receipts remitted to
the charity. For example, a charity might choose a particular type
of fundraising drive, or a particular solicitor, expecting to
receive a large sum as measured by total dollars,
Page 487 U. S. 792
rather than the percentage of dollars remitted. Or, a
solicitation may be designed to sacrifice short-term gains in order
to achieve long-term, collateral, or noncash benefits. To
illustrate, a charity may choose to engage in the advocacy or
dissemination of information during a solicitation, or may seek the
introduction of the charity's officers to the philanthropic
community during a special event (
e.g., an awards dinner).
Consequently, even if the State had a valid interest in protecting
charities from their own naivete or economic weakness, the Act
would not be narrowly tailored to achieve it.
The second distinguishing feature the State offers is the
flexibility it has built into its Act. The State describes the
second of its three-tiered definition of "unreasonable" and
"excessive" as imposing no presumption one way or the other as to
the reasonableness of the fee, although unreasonableness may be
demonstrated by a showing that the solicitation does not involve
the advocacy or dissemination of information on the charity's
behalf and at the charity's direction. The State points out that
even the third tier's presumption of unreasonableness may be
rebutted.
It is important to clarify, though, what we mean by
"reasonableness" at this juncture. As we have just demonstrated,
supra at
487 U. S.
790-791 and this page, the State's generalized interest
in unilaterally imposing its notions of fairness on the fundraising
contract is both constitutionally invalid and insufficiently
related to a percentage-based test. Consequently, what remains is
the more particularized interest in guaranteeing that the
fundraiser's fee be "reasonable" in the sense that it not be
fraudulent. The interest in protecting charities (and the public)
from fraud is, of course, a sufficiently substantial interest to
justify a narrowly tailored regulation. The question, then, is
whether the added flexibility of this regulation is sufficient to
tailor the law to this remaining interest. We conclude that it is
not.
Page 487 U. S. 793
Despite our clear holding in
Munson that there is no
nexus between the percentage of funds retained by the fundraiser
and the likelihood that the solicitation is fraudulent, the State
defines,
prima facie, an "unreasonable" and "excessive"
fee according to the percentage of total revenues collected.
Indeed, the State's test is even more attenuated than the one held
invalid in
Munson, which at least excluded costs and
expenses of solicitation from the fee definition. 467 U.S. at
467 U. S. 950,
n. 2. Permitting rebuttal cannot supply the missing nexus between
the percentages and the State's interest. [
Footnote 7]
But this statute suffers from a more fundamental flaw. Even if
we agreed that some form of a percentage-based measure could be
used, in part, to test for fraud, we could not agree to a measure
that requires the speaker to prove "reasonableness" case by case
based upon what is at best a loose inference that the fee might be
too high. Under the Act, once a
prima facie showing of
unreasonableness is made, the fundraiser must rebut the showing.
Proof that the solicitation involved the advocacy or dissemination
of information is not alone sufficient; it is merely a factor that
is added to the calculus submitted to the factfinder, who may still
decide that the costs incurred or the fundraiser's profit were
excessive. Similarly, the Act is impermissibly insensitive to the
realities faced by small or unpopular charities, which must often
pay more than 35% of the gross receipts collected to the fundraiser
due to the difficulty of attracting donors.
See Munson,
467 U.S. at
467 U. S. 967.
Again, the burden is placed on the fundraiser in such cases to
rebut the presumption of unreasonableness.
According to the State, we need not worry over this burden, as
standards for determining "[r]easonable fundraising fees will be
judicially defined over the years." Reply Brief for Appellants 6.
Speakers, however, cannot be made to
Page 487 U. S. 794
wait for "years" before being able to speak with a measure of
security. In the interim, fundraisers will be faced with the
knowledge that every campaign incurring fees in excess of 35%, and
many campaigns with fees between 20% and 35%, will subject them to
potential litigation over the "reasonableness" of the fee. And, of
course, in every such case, the fundraiser must bear the costs of
litigation and the risk of a mistaken adverse finding by the
factfinder, even if the fundraiser and the charity believe that the
fee was in fact fair. This scheme must necessarily chill speech in
direct contravention of the First Amendment's dictates.
See
Munson, supra, at
467 U. S. 969;
New York Times Co. v. Sullivan, 376 U.
S. 254,
376 U. S. 279
(1964). [
Footnote 8]
This chill and uncertainty might well drive professional
fundraisers out of North Carolina, or at least encourage them to
cease engaging in certain types of fundraising (such as
solicitations combined with the advocacy and dissemination of
information) or representing certain charities (primarily small or
unpopular ones), all of which will ultimately "reduc[e] the
quantity of expression."
Buckley v. Valeo, 424 U. S.
1,
424 U. S. 19,
424 U. S. 39
(1976). Whether one views this as a restriction of the charities'
ability to speak,
Munson, supra, at
467 U. S. 967,
and n. 16, or a restriction of the professional fundraisers'
ability to speak,
Munson, supra, at
467 U. S. 955,
n. 6, the restriction is undoubtedly one on speech, and cannot be
countenanced here.
Page 487 U. S. 795
In striking down this portion of the Act, we do not suggest that
States must sit idly by and allow their citizens to be defrauded.
North Carolina has an antifraud law, and we presume that law
enforcement officers are ready and able to enforce it. Further,
North Carolina may constitutionally require fundraisers to disclose
certain financial information to the State, as it has since 1981.
Munson, supra, at
467 U. S. 967, n. 16. If this is not the most efficient
means of preventing fraud, we reaffirm simply and emphatically that
the First Amendment does not permit the State to sacrifice speech
for efficiency.
Schaumburg, 444 U.S. at
444 U. S. 639;
Schneider v. State, 308 U. S. 147,
308 U. S. 164
(1939).
III
We turn next to the requirement that professional fundraisers
disclose to potential donors, before an appeal for funds, the
percentage of charitable contributions collected during the
previous 12 months that were actually turned over to charity.
Mandating speech that a speaker would not otherwise make
necessarily alters the content of the speech. We therefore consider
the Act as a content-based regulation of speech.
See Miami
Herald Publishing Co. v. Tornillo, 418 U.
S. 241,
418 U. S. 256
(1974) (statute compelling newspaper to print an editorial reply
"exacts a penalty on the basis of the content of a newspaper").
The State argues that, even if charitable solicitations
generally are fully protected, this portion of the Act regulates
only commercial speech because it relates only to the professional
fundraiser's profit from the solicited contribution. Therefore, the
State asks us to apply our more deferential commercial speech
principles here.
See generally Virginia Pharmacy Bd. v.
Virginia Citizens Consumer Council, Inc., 425 U.
S. 748 (1976).
It is not clear that a professional's speech is necessarily
commercial whenever it relates to that person's financial
motivation for speaking.
Cf. 421 U. S.
Virginia, 421 U.S.
Page 487 U. S. 796
809,
421 U. S. 826
(1975) (state labels cannot be dispositive of degree of First
Amendment protection). But even assuming, without deciding, that
such speech, in the abstract, is indeed merely "commercial," we do
not believe that the speech retains its commercial character when
it is inextricably intertwined with otherwise fully protected
speech. Our lodestars in deciding what level of scrutiny to apply
to a compelled statement must be the nature of the speech taken as
a whole and the effect of the compelled statement thereon. This is
the teaching of
Schaumburg and
Munson, in which
we refused to separate the component parts of charitable
solicitations from the fully protected whole. Regulation of a
solicitation
"must be undertaken with due regard for the reality that
solicitation is characteristically intertwined with informative and
perhaps persuasive speech . . . and for the reality that, without
solicitation, the flow of such information and advocacy would
likely cease."
Schaumburg, supra, at
444 U. S. 632,
quoted in
Munson, 467 U.S. at
467 U. S.
959-960.
See also Meyer v. Grant, 486 U.
S. 414,
486 U. S. 422,
n. 5 (1988);
Thomas v. Collins, 323 U.S. at
323 U. S.
540-541. Thus, where, as here, the component parts of a
single speech are inextricably intertwined, we cannot parcel out
the speech, applying one test to one phrase and another test to
another phrase. Such an endeavor would be both artificial and
impractical. Therefore, we apply our test for fully protected
expression. [
Footnote 9]
North Carolina asserts that, even so, the First Amendment
interest in compelled speech is different than the interest in
compelled silence; the State accordingly asks that we apply a
deferential test to this part of the Act. There is certainly some
difference between compelled speech and compelled silence, but, in
the context of protected speech, the difference is without
constitutional significance, for the First Amendment
Page 487 U. S. 797
guarantees "freedom of speech," a term necessarily comprising
the decision of both what to say and what
not to say.
The constitutional equivalence of compelled speech and compelled
silence in the context of fully protected expression was
established in
Miami Herald Publishing Co. v. Tornillo,
supra. There, the Court considered a Florida statute requiring
newspapers to give equal reply space to those they editorially
criticize. We unanimously held the law unconstitutional as content
regulation of the press, expressly noting the identity between the
Florida law and a direct prohibition of speech.
"The Florida statute operates as a command in the same sense as
a statute or regulation forbidding appellant to publish a specified
matter. Governmental restraint on publishing need not fall into
familiar or traditional patterns to be subject to constitutional
limitations on governmental powers."
Id. at
418 U. S. 256.
That rule did not rely on the fact that Florida restrained the
press, and has been applied to cases involving expression
generally. For example, in
Wooley v. Maynard, 430 U.
S. 705,
430 U. S. 714
(1977), we held that a person could not be compelled to display the
slogan "Live Free or Die." In reaching our conclusion, we relied on
the principle that
"[t]he right to speak and the right to refrain from speaking are
complementary components of the broader concept of 'individual
freedom of mind,'"
as illustrated in
Tornillo. 430 U.S. at
430 U. S. 714
(quoting
West Virginia Board of Education v. Barnette,
319 U. S. 624,
319 U. S. 637
(1943)).
See also Pacific Gas & Electric Co. v. Public
Utilities Comm'n of California, 475 U. S.
1,
475 U. S. 9-11
(1986) (plurality opinion of Powell, J.) (characterizing
Tornillo in terms of freedom of speech);
Harper &
Row Publishers, Inc. v. Nation Enterprises, 471 U.
S. 539,
471 U. S. 559
(1985);
Abood v. Detroit Board of Education, 431 U.
S. 209,
431 U. S.
234-235 (1977);
West Virginia Board of Education v.
Barnette, supra.
These cases cannot be distinguished simply because they involved
compelled statements of opinion, while here we deal with compelled
statements of "fact": either form of compulsion
Page 487 U. S. 798
burdens protected speech. Thus, we would not immunize a law
requiring a speaker favoring a particular government project to
state at the outset of every address the average cost overruns in
similar projects, or a law requiring a speaker favoring an
incumbent candidate to state during every solicitation that
candidate's recent travel budget. Although the foregoing factual
information might be relevant to the listener, and, in the latter
case, could encourage or discourage the listener from making a
political donation, a law compelling its disclosure would clearly
and substantially burden the protected speech.
We believe, therefore, that North Carolina's content-based
regulation is subject to exacting First Amendment scrutiny. The
State asserts as its interest the importance of informing donors
how the money they contribute is spent in order to dispel the
alleged misperception that the money they give to professional
fundraisers goes in greater-than-actual proportion to benefit
charity. To achieve this goal, the State has adopted a prophylactic
rule of compelled speech, applicable to all professional
solicitations. We conclude that this interest is not as weighty as
the State asserts, and that the means chosen to accomplish it are
unduly burdensome, and not narrowly tailored.
Although we do not wish to denigrate the State's interest in
full disclosure, the danger the State posits is not as great as
might initially appear. First, the State presumes that the charity
derives no benefit from funds collected but not turned over to it.
Yet this is not necessarily so. For example, as we have already
discussed in greater detail, where the solicitation is combined
with the advocacy and dissemination of information, the charity
reaps a substantial benefit from the act of solicitation itself.
See Munson, 467 U.S. at
467 U. S. 963;
Schaumburg, 444 U.S. at
444 U. S. 635.
Thus, a significant portion of the fundraiser's "fee" may well go
toward achieving the charity's objectives even though it is not
remitted to the
Page 487 U. S. 799
charity in cash. [
Footnote
10] Second, an unchallenged portion of the disclosure law
requires professional fundraisers to disclose their professional
status to potential donors, thereby giving notice that at least a
portion of the money contributed will be retained. [
Footnote 11] Donors are also undoubtedly
aware that solicitations incur costs, to which part of their
donation might apply. And, of course, a donor is free to inquire
how much of the contribution will be turned over to the charity.
Under another North Carolina statute, also unchallenged,
fundraisers must disclose this information upon request.
N.C.Gen.Stat. § 131C-16 (1986). Even were that not so, if the
solicitor refuses to give the requested information, the potential
donor may (and probably would) refuse to donate.
Moreover, the compelled disclosure will almost certainly hamper
the legitimate efforts of professional fundraisers to raise money
for the charities they represent. First, this provision necessarily
discriminates against small or unpopular charities, which must
usually rely on professional fundraisers. Campaigns with high costs
and expenses carried out by professional fundraisers must make
unfavorable disclosures, with the predictable result that such
solicitations will prove unsuccessful. Yet the identical
solicitation with its high costs and expenses, if carried out by
the employees of a charity or volunteers, results in no compelled
disclosure, and therefore greater success. Second, in the context
of a
Page 487 U. S. 800
verbal solicitation, if the potential donor is unhappy with the
disclosed percentage, the fundraiser will not likely be given a
chance to explain the figure; the disclosure will be the last words
spoken as the donor closes the door or hangs up the phone.
[
Footnote 12] Again, the
predictable result is that professional fundraisers will be
encouraged to quit the State or refrain from engaging in
solicitations that result in an unfavorable disclosure.
In contrast to the prophylactic, imprecise, and unduly
burdensome rule the State has adopted to reduce its alleged donor
misperception, more benign and narrowly tailored options are
available. For example, as a general rule, the State may itself
publish the detailed financial disclosure forms it requires
professional fundraisers to file. This procedure would communicate
the desired information to the public without burdening a speaker
with unwanted speech during the course of a solicitation.
Alternatively, the State may vigorously enforce its antifraud laws
to prohibit professional fundraisers from obtaining money on false
pretenses or by making false statements. These more narrowly
tailored rules are in keeping with the First Amendment directive
that government not dictate the content of speech absent compelling
necessity, and then, only by means precisely tailored.
Page 487 U. S. 801
E.g., Consolidated Edison Co. v. Public Service Comm'n of
New York, 447 U. S. 530,
447 U. S.
537-538 (1980).
"Broad prophylactic rules in the area of free expression are
suspect. Precision of regulation must be the touchstone in an area
so closely touching our most precious freedoms."
NAACP v. Button, 371 U. S. 415,
371 U. S. 438
(1963) (citations omitted).
IV
Finally, we address the licensing requirement. This provision
requires professional fundraisers to await a determination
regarding their license application before engaging in
solicitation, while volunteer fundraisers, or those employed by the
charity, may solicit immediately upon submitting an
application.
Given our previous discussion and precedent, it will not do
simply to ignore the First Amendment interest of professional
fundraisers in speaking. It is well settled that a speaker's rights
are not lost merely because compensation is received; a speaker is
no less a speaker because he or she is paid to speak.
E.g., New
York Times Co. v. Sullivan, 376 U.S. at 265-266. And the
State's asserted power to license professional fundraisers carries
with it (unless properly constrained) the power directly and
substantially to affect the speech they utter. Consequently, the
statute is subject to First Amendment scrutiny.
See Lakewood v.
Plain Dealer Publishing Co., 486 U. S. 750,
486 U. S.
755-756 (1988) (when a State enacts a statute requiring
periodic licensing of speakers, at least when the law is directly
aimed at speech, it is subject to First Amendment scrutiny to
ensure that the licensor's discretion is suitably confined).
[
Footnote 13]
Page 487 U. S. 802
Generally, speakers need not obtain a license to speak. However,
that rule is not absolute. For example, States may impose valid
time, place, or manner restrictions.
See Cox v. New
Hampshire, 312 U. S. 569
(1941). North Carolina seeks to come within the exception by
alleging a heightened interest in regulating those who solicit
money. Even assuming that the State's interest does justify
requiring fundraisers to obtain a license before soliciting, such a
regulation must provide that the licensor "will, within a specified
brief period, either issue a license or go to court."
Freedman
v. Maryland, 380 U. S. 51,
380 U. S. 59
(1965). That requirement is not met here, for the Charitable
Solicitations Act (as amended) permits a delay without limit. The
statute on its face does not purport to require when a
determination must be made, nor is there an administrative
regulation or interpretation doing so. The State argues, though,
that its history of issuing licenses quickly constitutes a practice
effectively constraining the licensor's discretion.
See Poulos
v. New Hampshire, 345 U. S. 395
(1953). We cannot agree. The history to which the State refers
relates to the period before the 1985 amendments, at which time
professional fundraisers were permitted to solicit as soon as their
applications were filed. Then, delay permitted the speaker's
speech; now, delay compels the speaker's silence. Under these
circumstances, the licensing provision cannot stand. [
Footnote 14]
Page 487 U. S. 803
V
We hold that the North Carolina Charitable Solicitations Act is
unconstitutional in the three respects before us. Accordingly, the
judgment of the Court of Appeals is
Affirmed.
[
Footnote 1]
"Fee" for purposes of the statute includes the costs and
expenses of solicitation. N.C.Gen.Stat. § 131C-3(5a) (1986).
[
Footnote 2]
North Carolina Gen.Stat. § 131C-17.2 (1986) provides:
"(a) No professional fund-raising counsel or professional
solicitor who contracts to raise funds for a person established for
a charitable purpose may charge such person established for a
charitable purpose an excessive and unreasonable fund-raising fee
for raising such funds."
"(b) For purposes of this section a fund-raising fee of twenty
percent (20%) or less of the gross receipts of all solicitations on
behalf of a particular person established for a particular
charitable purpose is deemed to be reasonable and
nonexcessive."
"(c) For purposes of this section a fund-raising fee greater
than twenty percent (20%) but less than thirty-five percent (35%)
of the gross receipts of all solicitations on behalf of a
particular person established for a charitable purpose is excessive
and unreasonable if the party challenging the fund-raising fee also
proves that the solicitation does not involve the dissemination of
information, discussion, or advocacy relating to public issues as
directed by the person established for a charitable purpose which
is to benefit from the solicitation."
"(d) For purposes of this section only, a fund-raising fee of
thirty-five percent (35%) or more of the gross receipts of all
solicitations on behalf of a particular person established for a
charitable purpose may be excessive and unreasonable without
further evidence of any fact by the party challenging the
fund-raising fee. The professional fund-raising counsel or
professional solicitor may successfully defend the fund-raising fee
by proving that the level of the fee charged was necessary:"
"(1) Because of the dissemination of information, discussion, or
advocacy relating to public issues as directed by the person
established for a charitable purpose which is to benefit from the
solicitation, or"
"(2) Because otherwise ability of the person established for a
charitable purpose which is to benefit from the solicitations to
raise money or communicate its ideas, opinions, and positions to
the public would be significantly diminished."
"(e) Where the fund-raising fee charged by a professional
fund-raising counsel or a professional solicitor is determined to
be excessive and unreasonable, the fact finder making that
determination shall then determine a reasonable fee under the
circumstances. . . ."
[
Footnote 3]
North Carolina Gen.Stat. § 131C-16.1 (1986) states:
"During any solicitation and before requesting or appealing
either directly or indirectly for any charitable contribution a
professional solicitor shall disclose to the person solicited:"
"(1) His name; and,"
"(2) The name of the professional solicitor or professional
fund-raising counsel by whom he is employed and the address of his
employer; and"
"(3) The average of the percentage of gross receipts actually
paid to the persons established for a charitable purpose by the
professional fundraising counsel or professional solicitor
conducting the solicitation for all charitable sales promotions
conducted in this State by that professional fund-raising counsel
or professional solicitor for the past 12 months, or for all
completed charitable sales promotions where the professional
fundraising counsel or professional solicitor has been soliciting
funds for less than 12 months."
[
Footnote 4]
North Carolina Gen.Stat. § 131C-6 (1986) provides:
"Any person who acts as a professional fund-raising counsel or
professional solicitor shall apply for and obtain an annual license
from the Department [of Human Resources], and shall not act as a
professional fund-raising counsel or professional solicitor until
after obtaining such license."
[
Footnote 5]
The dissent suggests that the State's regulation is merely
economic, having only an indirect effect on protected speech.
However, as we demonstrate, the burden here is hardly incidental to
speech. Far from the completely incidental impact of, for example,
a minimum wage law, a statute regulating how a speaker may speak
directly affects that speech.
See Meyer v. Grant,
486 U. S. 414,
486 U. S.
421-423, and n. 5 (1988). Here, the desired and intended
effect of the statute is to encourage some forms of solicitation
and discourage others.
[
Footnote 6]
North Carolina was apparently surprised to learn of the
charities' opposition to its law, and at oral argument could only
surmise that the charities had been misinformed regarding the
pro-charity nature of the statute. Tr. of Oral Arg. 20-21.
Nonetheless, every charity that has stated a position before us in
this case (and there are almost 60 of them other than appellees)
supports the judgment below.
[
Footnote 7]
Even if percentages are not completely irrelevant to the
question of fraud, their relationship to the question is, at best,
tenuous, as
Schaumburg and
Munson
demonstrate.
[
Footnote 8]
The dissent is correct that the statute requires that expenses
incurred in the dissemination of information be considered
legitimate by the factfinder. But that does not address the primary
defect here: that fraud is presumed by a surrogate and imprecise
formula. Nor does it suffice to argue, as does the dissent, that
the statute is valid because the fundraiser, not the charity, is
the object of the regulation. Fining the fundraiser based upon its
speech for the charity has an obvious and direct relation to the
charity's speech.
See Munson, 467 U.S. at
467 U. S. 967,
and n. 16. Moreover, the fundraiser has an independent First
Amendment interest in the speech, even though payment is received.
See, e.g., New York Times Co. v. Sullivan, 376 U.S. at
376 U. S.
265-266.
[
Footnote 9]
Of course, the dissent's analogy to the securities field
entirely misses the point. Purely commercial speech is more
susceptible to compelled disclosure requirements.
See Zauderer
v. Office of Disciplinary Counsel of Supreme Court of Ohio,
471 U. S. 626
(1985).
[
Footnote 10]
In addition, the net "fee" itself benefits the charity in the
same way that an attorney's fee benefits the charity, or the
purchase of any other professional service benefits the charity.
That the fundraiser's fee does not first pass through the charity's
hands is of small import.
[
Footnote 11]
The Act, as written, requires the fundraiser to disclose his or
her employer's name and address. Arguably, this may not clearly
convey to the donor that the solicitor is employed by a for-profit
organization, for example, where the employer's name is "Charitable
Fundraisers of America." However, nothing in this opinion should be
taken to suggest that the State may not require a fundraiser to
disclose unambiguously his or her professional status. On the
contrary, such a narrowly tailored requirement would withstand
First Amendment scrutiny.
[
Footnote 12]
The figure chosen by the State for disclosure is curious. First,
it concerns unrelated past solicitations without regard for whether
they are similar to the solicitation occurring at the time of
disclosure. Thus, the high percentage of retained fees for past
dinner-dance fundraisers must be disclosed to potential
contributors during a less expensive door-to-door solicitation.
Second, the figure does not separate out the costs and expenses of
prior solicitations, such as printing, even though these expenses
must also be borne by charities not subject to the disclosure
requirement (
i.e., those engaging in employee or volunteer
staffed campaigns). The use of the "gross" percentage is even more
curious in light of the fact that most contracts between the
solicitor and the charity provide for a fee based on the percentage
of "net" funds collected (
i.e., the gross funds collected
less costs), making this more relevant figure far easier to come
by. Brief for Appellants 15.
[
Footnote 13]
Even were we to focus only on the charities' First Amendment
interest here, we still could not adopt the dissent's reasoning,
for its logic in that regard necessarily depends on the premise
that professional fundraisers are interchangeable from the
charities' vantage. There is no reason to believe that is so.
Fundraisers may become associated with particular clients or
causes. Regulating these fundraisers with the heavy hand that
unbridled discretion allows affects the speech of the clients or
causes with which they are associated. Nor are we persuaded by the
dissent's assertion that this statute merely licenses a profession,
and therefore is subject only to rationality review. Although
Justice Jackson did express his view that solicitors could be
licensed, a proposition not before us, he never intimated that the
licensure was devoid of all First Amendment implication.
Thomas
v. Collins, 323 U. S. 516,
323 U. S.
544-545 (1945) (Jackson, J., concurring).
[
Footnote 14]
In addition, appellees assert that the Secretary of State has
unbridled discretion to grant or deny a license, and that the
differential treatment of professional and nonprofessional
fundraisers denies them equal protection of the laws. In light of
our conclusion that the licensing provision is unconstitutional on
other grounds, we do not reach these questions.
JUSTICE SCALIA, concurring in part and concurring in
judgment.
We have held the solicitation of money by charities to be fully
protected as the dissemination of ideas.
See ante at
487 U. S.
787-789;
Secretary of State of Maryland v. Joseph H.
Munson Co., 467 U. S. 947,
467 U. S.
959-961 (1984);
Schaumburg v. Citizens for a Better
Environment, 444 U. S. 620,
444 U. S.
628-632 (1980). It is axiomatic that, although
fraudulent misrepresentation of facts can be regulated,
cf. New
York Times Co. v. Sullivan, 376 U. S. 254
(1964), the dissemination of ideas cannot be regulated to prevent
it from being unfair or unreasonable,
see, e.g., Hustler
Magazine, Inc. v. Falwell, 485 U. S. 46,
485 U. S. 51,
485 U. S. 54,
485 U. S. 57
(1988);
Miami Herald Publishing Co. v. Tornillo,
418 U. S. 241,
418 U. S.
256-258 (1974);
Organization for a Better Austin v.
Keefe, 402 U. S. 415,
402 U. S. 419
(1971);
Kingsley International Pictures Corp. v. Regents of
University of New York, 360 U. S. 684,
360 U. S.
688-689 (1959);
Baumgartner v. United States,
322 U. S. 665,
322 U. S.
673-674 (1944). Because the opinion of the Court, except
for
footnote 11 is
consistent with this principle, I join all of the opinion with that
exception.
As to the last two sentences of that footnote, which depart from
the case at hand to make a pronouncement upon a situation that is
not before us, I do not see how requiring the professional
solicitor to disclose his professional status is narrowly tailored
to prevent fraud. Where core First Amendment speech is at issue,
the State can assess liability for specific instances of deliberate
deception, but it cannot impose a prophylactic rule requiring
disclosure even where misleading statements are not made.
Cf.
Landmark Communications, Inc. v. Virginia, 435 U.
S. 829,
435 U. S.
843-844 (1978).
Page 487 U. S. 804
Since donors are assuredly aware that a portion of their
donations may go to solicitation costs and other administrative
expenses -- whether the solicitor is a professional, an in-house
employee, or even a volunteer -- it is not misleading in the great
mass of cases for a professional solicitor to request donations
"for" a specific charity without announcing his professional
status. Compensatory employment is, I would judge, the natural
order of things, and one would expect volunteer solicitors to
announce that status as a selling point.
The dictum in
footnote 11
represents a departure from our traditional understanding
embodied in the First Amendment, that where the dissemination of
ideas is concerned, it is safer to assume that the people are smart
enough to get the information they need than to assume that the
government is wise or impartial enough to make the judgment for
them.
JUSTICE STEVENS, concurring in part and dissenting in part.
Although I join Parts
487 U. S.
487 U. S. and
487 U. S. I
agree with THE CHIEF JUSTICE that the licensing provisions in the
North Carolina statute do not impose a significant burden on the
charities' ability to speak, and that there is no evidence
suggesting that the State will be dilatory in the processing of
license applications. Thus, I respectfully dissent from
487 U. S.
CHIEF JUSTICE REHNQUIST, with whom JUSTICE O'CONNOR Joins,
dissenting.
I
In 1980, this Court held invalid an ordinance enacted by a
suburb of Chicago regulating the percentage of the gross amount of
money raised by charitable solicitors which might be used for the
cost of conducting the solicitation.
Schaumburg v. Citizens for
a Better Environment, 444 U. S. 620. In
an effort to comply with that decision, Maryland enacted a statute
forbidding charities to contract with professional fundraisers in
such a way as would allow the fundraisers to
Page 487 U. S. 805
retain more than 25% of the money collected. Even though an
administrative official was empowered to waive this requirement
when its imposition would effectively prevent the charitable
organization from raising money, the Court nonetheless invalidated
the statute.
Secretary of State of Maryland v. Joseph H. Munson
Co., 467 U. S. 947
(1984). Following the decision in
Munson, North Carolina
revised its Charitable Solicitations Act to contain the provisions
described in the opinion of the Court today. The Court now
invalidates the North Carolina provisions as well.
The Court's opinion in
Schaumburg relied on the seminal
cases of
Lovell v. Griffin, 303 U.
S. 444 (1938),
Schneider v. State, 308 U.
S. 147 (1939), and
Martin v. Struthers,
319 U. S. 141
(1943), as establishing the right of charitable solicitors under
the First Amendment to be free from burdensome governmental
regulation. It is interesting to compare the activities of the
three "solicitors" in those cases with the activities of
professional fundraisers in cases like the present one. In
Lovell, for example, appellant was convicted for
distributing a religious pamphlet and a magazine called the "Golden
Age" without a permit. 303 U.S. at
303 U. S. 450.
In
Schneider, the evidence showed that one of the
petitioners was a "Jehovah's Witness" who canvassed house-to-house
seeking to leave behind some literature and to obtain contributions
to defray the cost of printing additional literature for others.
308 U.S. at
308 U. S. 158.
In
Martin, the appellant was also a Jehovah's Witness, who
went door-to-door distributing to residents of homes leaflets
advertising a religious meeting. 319 U.S. at
319 U. S.
142.
These activities are a far cry indeed from the activities of
professional solicitors such as those involved in
Munson
and the present case. In
Munson, the plaintiff, an Indiana
corporation, was
"a professional for-profit fundraiser in the business of
promoting fundraising events and giving advice to customers on how
those events should be conducted. Its Maryland customers include[d]
various chapters of the Fraternal
Page 487 U. S. 806
Order of Police."
467 U.S. at
467 U. S. 950.
The professional fundraisers in the present case presumably operate
in the same manner. Yet the Court obdurately refuses to allow the
various States which have legislated in this area to distinguish
between the sort of incidental fundraising involved in
Lovell,
Schneider, and
Martin, on the one hand, and the
entirely commercial activities of people whose job is, simply put,
figuring out how to raise money for charities.
The Court has recognized that the commercial aspects of
newsgathering and publishing are different from the editorial
function, and has upheld regulation of the former against claims
based on the First Amendment. A newsgathering organization is
subject to the provisions of the National Labor Relations Act,
Associated Press v. NLRB, 301 U.
S. 103 (1937); a newspaper is subject to the antitrust
laws,
Indiana Farmer's Guide Publishing Co. v. Prairie Farmer
Publishing Co., 293 U. S. 268
(1934), as well as the provisions of the Fair Labor Standards Act,
Smith v. Evening News Assn., 371 U.
S. 195 (1962). It seems to me that the vaguely defined
activity of "charitable solicitation," when pursued by professional
fundraisers such as are involved in this case, deserves no more
favorable treatment.
II
But even accepting that
Schaumburg and
Munson
were rightly decided, I cannot join in the extension of their
principles to the North Carolina statute involved here. This Act
provides, at its heart, only that no professional fundraiser may
charge a charity "an excessive and unreasonable fundraising fee."
N.C.Gen.Stat. § 131C-17.2(a) (1986). Unlike the statute at issue in
Schaumburg, which directly prevented charities from
soliciting donations unless they could show that 75% of the
proceeds were used for charitable purposes, 444 U.S. at
444 U. S. 624,
the fee provisions of this Act put no direct burden on the
charities themselves. And, unlike the Maryland statute in
Munson, the fee provisions are designed
Page 487 U. S. 807
to allow the professional fundraiser whose fees are challenged
to introduce evidence that the fees were, in fact, reasonable under
the circumstances. In my view, the distinctions between the statute
in this case and those in
Munson and
Schaumburg
are crucial to the proper First Amendment analysis of the Act, for
they make this Act both less burdensome on the protected speech
activities of charitable organizations and more carefully tailored
to the interests that the State is trying to serve by regulating
fundraising fees.
First, as to the nature of the burden on protected speech: the
Court today concludes flatly that "this regulation burdens speech,
and must be considered accordingly."
Ante at
487 U. S. 790.
As far as I know, this Court has never held that an economic
regulation with some impact on protected speech, no matter how
small or indirect, must be subjected to strict scrutiny under the
First Amendment. The only burden on speech identified in the
Court's opinion is that professional fundraisers may be "chill[ed]"
by the risk that, if they charge more than 20% of the gross, they
may be required to show that the fee they charged was reasonable.
The Court speculates that this "chill" will "drive professional
fundraisers out of North Carolina" or induce them to cease certain
types of fundraising.
Ante at
487 U. S. 794.
Of course, it is undeniable that a price control regulation --
which is what these fee provisions are, in essence -- will have
some impact on the supply of the services whose prices are being
regulated.
See Munson, 467 U.S. at
467 U. S. 979
(REHNQUIST J., dissenting). But to say that professional
fundraisers will be driven from the State is the rankest
speculation; they may be a far doughtier breed than the Court
realizes. I am unwilling to say, on this extremely bare record,
that a statute prohibiting a professional fundraiser from charging
fees that are "unreasonable and excessive" will have the sort of
impact on the availability of fundraising services that the Court
hypothesizes. The plaintiffs in this case had an opportunity to put
in evidence in the District Court to this effect, but did not do
so; we should not
Page 487 U. S. 808
substitute our guesswork as to the economic consequences of the
regulation for a conclusion that ought to be deduced from
evidence.
I believe that, on this record, the minimal burden on speech
resulting from the statute can be characterized as remote or
incidental, and that therefore there is no reason to apply
"heightened scrutiny" to the regulation of fees charged by the
professional fundraisers. The fee provisions of the Act are
rationally related to the State's legitimate interests in
preventing fraud on potential donors and protecting against
overcharging of charities by professional fundraisers.
Even if heightened scrutiny should apply, the fee provisions in
the North Carolina statute, in my view, still survive. This Court
has never indicated that the State's interest in preventing fraud
would not be sufficient to support a narrowly tailored regulation
of fees.
See Schaumburg, 444 U.S. at
444 U. S.
636-637;
Munson, supra, at
467 U. S. 961.
Here, the State asserts the additional interest of "promot[ing] the
efficient transmission of the public's money to the charity through
the medium of the for-profit, professional fundraiser," Reply Brief
for Appellants 3, or, as I put it in
Munson, protecting
the
"expectations of the donor who thinks that his money will be
used to benefit the charitable purpose in the name of which the
money was solicited,"
467 U.S. at
467 U. S. 980,
n. 2. [
Footnote 2/1]
Page 487 U. S. 809
In determining whether the North Carolina statute narrowly
serves these interests, it is important to note that the statute
does not impose a blanket prohibition upon fees that exceed a
certain proportion of gross receipts, as did the statute in
Munson. [
Footnote 2/2] The
basic judgment for the trier-of-fact under the fee provisions is
whether the fee is "reasonable." This determination is made not
only in light of the percentages, but also in light of such factors
as whether the solicitation
"involve[s] the dissemination of information, discussion, or
advocacy relating to public issues as directed by the [charity]
which is to benefit from the solicitation,"
§§ 131C-17.2(c), (d)(1), and whether the ability of the charity
to "raise money or communicate its ideas, opinions, and positions
to the public would be significantly diminished" by the charging of
a lower fee, § 131C-17.2(d)(2).
The inclusion of these factors in the "reasonableness"
determination of the factfinder protects against the vices of the
fixed-percentage scheme struck down in
Munson. The limited
waiver of the 25% limitation in
Munson was found
unacceptable because the statute gave the State "no discretion to
determine that reasons other than financial necessity warrant a
waiver." 467 U.S. at
467 U. S. 963.
This meant that organizations whose high solicitation costs were a
result of the dissemination of information would not be able to
obtain waivers, and would thus be prevented by the 25% limitation
from hiring professional fundraisers.
Id. at
467 U. S.
963-964. No such problem exists here: the statute
mandates that First Amendment considerations such as the desire to
disseminate information and the ability of the charity to get its
message across be taken into account by the factfinder in
determining
Page 487 U. S. 810
reasonableness. Thus, unlike the statute in
Munson, it
cannot be said that the reasonableness limitation is overbroad, as
the North Carolina statute is designed and carefully tailored to
avoid any restrictions on
"First Amendment activity that results in high costs, but is
itself a part of the charity's goal, or that is simply attributable
to the fact that the charity's cause proves to be unpopular,"
Munson, supra, at
467 U. S. 967.
In my view, the fee provisions of the statute thus satisfy the
constitutional requirement that it be narrowly tailored to serve
the State's compelling interests. I would reverse the judgment of
the Court of Appeals on this issue.
III
The next part of the statute to be considered is the requirement
of the Act that the fundraiser disclose to the potential donor "the
percentage of charitable contributions collected during the
previous 12 months that were actually turned over to charity,"
ante at
487 U. S. 795.
[
Footnote 2/3] The asserted purpose
of this provision is to "better inform the donating public as to
where its money will go," in order to assist the potential donor in
making the decision whether to donate. Brief for Appellants 17. The
Court concludes, after a lengthy discussion of the
constitutionality of "compelled statements," that strict
scrutiny
Page 487 U. S. 811
should be applied and that the statute does not survive that
scrutiny. I disagree.
This statute requires only that the professional solicitor
disclose certain relevant and verifiable facts to the potential
donor. Although the disclosure must occur at some point in the
context of the solicitation (which can be either oral or written),
it is directly analogous to mandatory disclosure requirements that
exist in other contexts, such as securities transactions. In my
view, the required disclosure of true facts in the course of what
is at least in part a "commercial" transaction -- the solicitation
of money by a professional fundraiser -- does not necessarily
create such a burden on core protected speech as to require that
strict scrutiny be applied. Indeed, it seems to me that, even in
cases where the solicitation involves dissemination of a "message"
by the charity (through the fundraiser), the disclosure required by
the statute at issue here will have little, if any, effect on the
message itself, though it may have an effect on the potential
donor's desire to contribute financially to the cause.
Of course, the percentage of previous collections turned over to
charities is only a very rough surrogate for the percentage of
collections which will be turned over by the fundraiser in the
particular drive in question. The State's position would be
stronger if, either in the legislative history or in the testimony
in the District Court, there was some showing that the percentage
charged by any particular fundraiser does not vary greatly from one
drive to another. Nonetheless, because the statute is aimed at the
commercial aspect of the solicitation, and because the State's
interests in enacting the disclosure requirements are sufficiently
strong, I cannot conclude that the First Amendment prevents the
State from imposing the type of disclosure requirement involved
here, at least in the absence of a showing that the effect of the
disclosure is is to dramatically limit contributions or impede a
charity's ability to disseminate ideas or information. But, again,
we have nothing but speculation to guide
Page 487 U. S. 812
us here, since neither party offered any evidence as to how this
provision would operate when the statute went into effect. On this
state of the record, and considering the rule that,
"[w]hen a statute is assailed as unconstitutional, we are bound
to assume the existence of any state of facts which would sustain
the statute in whole or in part,"
Alabama Federation of Labor v. McAdory, 325 U.
S. 450,
325 U. S. 465
(1945), I would uphold this provision.
IV
The final issue raised here is the validity of the licensing
provisions contained in the North Carolina statute. It is beyond
dispute that the statute differentiates between professional
fundraisers and volunteer or in-house fundraisers; the former may
not engage in solicitation until their license application is
accepted, while the latter may. But this fact alone does not impose
an impermissible burden on protected speech, nor does it require
that the licensing provisions be subjected to strict scrutiny.
For one thing, the requirement that a professional fundraiser
apply for and receive a license before being allowed to solicit
donations does not put any burden on the charities' ability to
speak. Even if the charity is one that typically relies on
professional fundraisers, the effect of the statute is to require
only that the fundraiser the charity hires is a fundraiser who has
been licensed by the State. While this effect may limit to some
degree the charity's ability to hire whomever it chooses as its
professional fundraiser, it will still be able to choose from
other, licensed professionals and obtain their assistance in
soliciting donations. [
Footnote
2/4] To the extent,
Page 487 U. S. 813
then, that the licensing provision has a burden on speech, it is
one that truly can be said to be incidental. [
Footnote 2/5] In addition, it is a burden that is
countenanced in other circumstances without any suggestion that
some type of heightened scrutiny should apply. For example, bar
admission requirements may have some incidental effect on First
Amendment protected activity by restricting a petitioner's right to
hire whomever he pleases to serve as his attorney, but we have
never suggested that state regulation of admission to the bar
should generally be subject to strict scrutiny. In my view, then,
requiring a professional fundraiser to wait until its license is
approved before engaging in solicitation does not create a
sufficiently significant burden on speech by charities that it
should be reviewed under any more exacting standard than that which
is typically applied to state occupational licensing
requirements.
Nor do I think that heightened scrutiny should apply because the
statute allegedly has some effect on speech by the professional
fundraisers themselves. It simply is not true that, in this case,
the fundraisers are prevented from engaging in any protected speech
on their own behalf by the State's licensing requirements; the
requirements only restrict their ability to engage in the
profession of "solicitation" without a license. We do not view bar
admission requirements as invalid because they restrict a
prospective lawyer's "right" to be hired as an advocate by a
client. So, in this case, we should not subject to strict scrutiny
the State's attempt to license a business -- professional
fundraising -- some of whose members might reasonably be thought to
pose a risk of fraudulent activity. As Justice Jackson put it:
Page 487 U. S. 814
"The modern state owes and attempts to perform a duty to protect
the public from those who seek for one purpose or another to obtain
its money. When one does so through the practice of a calling, the
state may have an interest in shielding the public against the
untrustworthy, the incompetent, or the irresponsible, or against
unauthorized representation of agency. A usual method of performing
this function is through a licensing system."
Thomas v. Collins, 323 U. S. 516,
323 U. S. 545
(1945) (concurring opinion).
In this case, the North Carolina statute's requirement that
professional solicitors wait for a license before engaging in any
solicitation is rationally related to the State's interest in
protecting the public and the charities themselves. The State could
reasonably have concluded that professional solicitors pose a
greater risk of fraud,
see, e.g., App. 60, making it more
important that the State have an opportunity to review their
license applications before they are allowed to engage in
solicitation. Presumably, there is less of a risk that a charity
will be defrauded or cheated by volunteer fundraisers and
fundraisers who are themselves employed by the charity, as these
individuals are more likely to be known to the charity.
See New
Orleans v. Dukes, 427 U. S. 297
(1976). I would, accordingly, uphold the licensing provisions of
the statute notwithstanding its different treatment of volunteers
and professionals.
[
Footnote 2/1]
I find it hard to understand the Court's complaint that the
statute's attempts to encourage charity and charitable
contributions and to maximize the funds that flow to charities are
based on "the paternalistic premise that charities' speech must be
regulated for their own benefit,"
ante at
487 U. S. 790.
All economic regulation of this sort is "paternalistic" in the
sense that it prevents parties who wish to contract with one
another from entering into a contract on precisely the terms that
they would choose. But ever since
West Coast Hotel Co. v.
Parrish, 300 U. S. 379
(1937), finally overruled
Lochner v. New York,
198 U. S. 45
(1905), and
Adkins v. Children's Hospital, 261 U.
S. 525 (1923), "paternalism" has been a perfectly
acceptable motive for legislative regulation of this sort.
Olsen v. Nebraska ex rel. Western Reference & Bond Assn.,
Inc., 313 U. S. 236,
313 U. S. 246
(1941).
[
Footnote 2/2]
Neither
Schaubmburg nor
Munson holds that the
"percentage of gross receipts" figure is irrelevant to the question
whether a particular fee is unreasonable or fraudulent.
See
Munson, 467 U.S. at
467 U. S. 961,
467 U. S. 966,
and n. 14. The problem with the figure was that, standing alone, it
was "simply too imprecise an instrument to accomplish" the end of
preventing fraud.
Id. at
467 U. S.
961.
[
Footnote 2/3]
In the words of the statute, the fundraiser must disclose
"[t]he average of the percentage of gross receipts actually paid
to [charities] by the professional fund-raising counsel or
professional solicitor conducting the solicitation for all
charitable sales promotions conducted in this State by that
[fundraiser] for the past 12 months, or for all completed
charitable sales promotions where the [fundraiser] has been
soliciting funds for less than 12 months."
N.C.Gen.Stat. § 131C-16.1(3) (1986). The statute also contains
several other disclosure provisions that are not at issue in this
appeal, including a requirement that the professional fundraiser
disclose his name, his employer, and his employer's address to
potential donors, §§ 131C-16. 1(1)-(2), and a requirement that any
person subject to licensure under the Act disclose upon request
"his percentage of fund-raising expenses and the purpose of the
organization," N.C.Gen.Stat. § 131C-16 (1986).
[
Footnote 2/4]
There is absolutely no basis in the record to conclude that the
licensing and registration requirements of the Act are so onerous
that they would drive professional fundraisers out of the State to
such an extent that there would be none left for a charity to hire.
If there were such evidence, then I would certainly agree that the
licensing provisions' did have the effect of restricting speech by
charities, at least for those charities who rely heavily on
professional fundraising.
[
Footnote 2/5]
Indeed, the record also indicates that, even if the charity
decides to wait until the licensing proceedings are complete in
order to hire a specific fundraiser, the charity will not have long
to wait.
See App. 58-62. The speed with which licensing
proceedings have been handled by the State in the past belies
appellees' claim that the waiting period for professional
fundraisers has a chilling effect on the charities' right to
speak.