Legal limits of solicitation?
High Court to decide if 'misleading' telemarketers are covered by free speech.
It's dinner time. The phone rings.
An unfamiliar voice on the line says she is soliciting on behalf of a worthwhile charity, which she identifies by name. She describes the noble and courageous work of the charitable group.
But what the solicitor doesn't mention is that for every dollar you pledge, the charity receives only 15 cents. In other words, 85 percent of anything donated will go to the professional telemarketer - not to the worthwhile cause mentioned in the pitch.
Knowing this, would you still make the donation?
To James Ryan, the attorney general of Illinois, such fundraising tactics are a form of fraud. But when he moved to shut down a similar telephone-solicitation operation in his state, three different courts defended the fundraising technique as a protected form of free speech.
Monday, the US Supreme Court will be asked to decide whether such conduct falls within First Amendment protections or is a form of criminal activity that enjoys no constitutional support.
"Deception for profit is not protected speech under the First Amendment," says Jerald Post, an Illinois assistant attorney general, in his brief to the court. "This is as much the case for half-truths and other implied misrepresentations ... as it is for blatant lies."
The company under scrutiny in Illinois, Telemarketing Associates, Inc., denies any wrongdoing. Its lawyers complain that the government is trying to dictate the content of its solicitation pitch.
"A charity soliciting by telephone only has a few seconds to deliver its chosen message," says Errol Copilevitz in his brief filed on behalf of Telemarketing Associates. "Government should not be allowed to interrupt and alter fully-protected speech by directly or indirectly compelling disclosure of fundraising costs."
At issue is fundraising undertaken by Telemarketing Associates for a group called VietNow, a charitable, nonprofit corporation set up to aid Vietnam veterans. From 1987 to 1995, Telemarketing Associates collected $7.1 million during VietNow pitches and turned over $1.1 million to the veterans aid group.
VietNow agreed to allow the telemarketer to keep 85 percent of all collected donations as fundraising fees. There was nothing in the contract requiring disclosure of this fact to donors.
Illinois isn't the only state concerned about such practices. Forty-four other states, the District of Columbia, and the Commonwealth of Puerto Rico joined in a friend-of-the-court brief urging the justices to make clear that such misrepresentations are a form of fraud, unprotected by the First Amendment.
"With alarming frequency, persons are establishing fundraising businesses for the purpose of retaining 80 to nearly 100 percent of funds raised, despite the fact that donors are led to believe that their donations will be used to help particular services performed by the charities," the states' brief says in part.
Telemarketers and a number of nonprofit groups say that the kinds of restrictions sought by Illinois would limit both the method and effectiveness of fundraising operations.
"There is a history of cases like this where various levels of government have tried to create guidelines for how solicitations can be handled, and set limits on how much can be spent on solicitations. The Supreme Court has said such efforts are unconstitutional," says Robert Corn-Revere, who filed a friend-of-the-court brief on behalf of the American Teleservices Association.
Such attempted regulations have been struck down, he says, because they fail to give proper weight to other benefits that charities receive when hiring professional fundraisers. Those benefits include informing prospective donors about related issues and increasing public awareness about the need for individual philanthropy in response to an immediate need.