2005 Minnesota Statutes

CHAPTER 309. Social and charitable organizations

  309.01 Repealed, 1951 c 550 s 78 

  309.02 Repealed, 1951 c 550 s 78 

  309.023 Repealed, 1951 c 550 s 78 

  309.03 Repealed, 1951 c 550 s 78 

  309.04 Repealed, 1951 c 550 s 78 

  309.05 Repealed, 1951 c 550 s 78 

  309.06 Repealed, 1951 c 550 s 78 

  309.07 Repealed, 1951 c 550 s 78 

  309.08 Repealed, 1951 c 550 s 78 

  309.09 Repealed, 1951 c 550 s 78 

  309.10 Repealed, 1971 c 568 s 27 

  309.11 Repealed, 1971 c 568 s 27 

  309.12 Repealed, 1971 c 568 s 27 

  309.13 Repealed, 1971 c 568 s 27 

  309.14 Repealed, 1971 c 568 s 27 

  309.15 Repealed, 1971 c 568 s 27 

  309.16 Repealed, 1971 c 568 s 27 

  309.17 Repealed, 1971 c 568 s 27 

  309.171 Repealed, 1971 c 568 s 27 

  309.175 Repealed, 1971 c 568 s 27 

  309.176 Repealed, 1973 c 494 s 6; 1973 c 651 s 4 

  309.18 Repealed, 1951 c 550 s 78 

  309.19 Repealed, 1951 c 550 s 78 

  309.20 Repealed, 1951 c 550 s 78 

REGULATION OF CHARITABLE SOLICITATIONS

     309.50 Solicitation of charitable funds; definitions. 

    Subdivision 1.    Scope.  As used in sections 309.50 to 
 309.61 the words, terms and phrases, defined in this section 
 have the meanings given them. 

    Subd. 2.    Person.  "Person" means any individual, 
 organization, group, firm, copartnership, association, 
 partnership, corporation, company, trust or joint stock 
 association, church, religious sect, religious denomination, 
 society, or league, and includes any trustee, receiver, 
 assignee, agent or other similar representative thereof. 

    Subd. 3.    Charitable purpose.  "Charitable purpose" 
 means any charitable, benevolent, philanthropic, patriotic, 
 religious, social service, welfare, educational, eleemosynary, 
 cultural, artistic, or public interest purpose, either actual or 
 purported. 

    Subd. 4.    Charitable organization.  "Charitable 
 organization" means any person who engages in or purports to 
 engage in solicitation for a charitable purpose and includes a 
 chapter, branch, area office or similar affiliate or any person 
 soliciting contributions within the state for a parent 
 charitable organization, but does not include an organization 
 whose primary purpose is supporting or opposing any candidate 
 for elective office, or influencing the nomination for election 
 or the election of any candidate for elective office. 

    Subd. 5.    Contribution.  "Contribution" means the 
 promise or grant of any money or property of any kind or value, 
 including the promise to pay, or payment for merchandise or 
 rights of any other description when representation is made by 
 or on behalf of the seller or solicitor that the whole or any 
 part of the price will be applied to a charitable purpose. 
 "Contributions" shall not include any funds obtained by a 
 charitable organization through grants from any governmental 
 agency.  "Contributions" shall include, in the case of a 
 charitable organization offering goods and services to the 
 public, the difference between the direct cost of the goods and 
 services to the charitable organization and the price at which 
 the charitable organization or any person acting on its behalf 
 resells those goods or services to the public. 

    Subd. 6.    Professional fund-raiser.  "Professional 
 fund-raiser" means any person who for financial compensation or 
 profit performs for a charitable organization any service in 
 connection with which contributions are, or will be, solicited 
 in this state by the compensated person or by any compensated 
 person the person employs, procures, or engages to solicit; or 
 any person who for compensation or profit plans, manages, 
 advises, consults, or prepares material for, or with respect to, 
 the solicitation in this state of contributions for a charitable 
 organization.  No investment adviser, investment adviser 
 representative, broker-dealer, or agent licensed pursuant to 
 chapter 80A, or lawyer, accountant, or banker who advises a 
 person to make a charitable contribution or who provides legal, 
 accounting, or financial advice in the ordinary course of a 
 profession or business shall be deemed, as a result of the 
 advice, to be a professional fund-raiser.  A bona fide salaried 
 officer, employee, or volunteer of a charitable organization is 
 not a professional fund-raiser. 

    Subd.  6a.    Accounting year.  "Accounting year" means 
 the 12 month period on which a charitable organization keeps its 
 financial records. 

    Subd. 7.  Repealed, 1969 c 112 s 17 

    Subd. 8.    Department.  "Department" means the 
 Department of Commerce. 

    Subd. 9.    Parent organization.  "Parent organization" 
 is that part of a charitable organization which coordinates, 
 supervises or exercises control over policy, fund-raising, and 
 expenditures, or assists or advises one or more chapters, 
 branches or affiliates in the state. 

    Subd. 10.    Solicit; solicitation.  "Solicit" and 
 "solicitation" mean the request directly or indirectly for any 
 contribution, regardless of which party initiates communication, 
 on the plea or representation that such contribution will or may 
 be used for any charitable purpose, and include any of the 
 following methods of securing contributions: 

    (1) oral or written request; 

    (2) the distribution, circulation, mailing, posting, or 
 publishing of any handbill, written advertisement, or 
 publication; 

    (3) the making of any announcement to the press, over the 
 radio, by television, by telephone, or telegraph concerning an 
 appeal, assemblage, athletic or sports event, bazaar, benefit, 
 campaign, contest, dance, drive, entertainment, exhibition, 
 exposition, party, performance, picnic, sale, or social 
 gathering, which the public is requested to patronize or to 
 which the public is requested to make a contribution; 

    (4) the sale of, offer, or attempt to sell, any 
 advertisement, advertising space, book, card, magazine, 
 merchandise, subscription, ticket of admission, or any other 
 thing, or the use of the name of any charitable person in any 
 offer or sale as an inducement or reason for purchasing any such 
 item, or the making of any statement in connection with any such 
 sale, that the whole or any part of the proceeds from any such 
 sale will be used for any charitable purpose.  A "solicitation" 
 shall be deemed completed when made, whether or not the person 
 making the same receives any contribution or makes any such sale.

    Subd. 11.    Management and general costs.  "Management 
 and general costs" means costs determined to be management and 
 general by generally accepted accounting principles. 

    Subd. 12.    Fund-raising costs.  "Fund-raising costs" 
 means costs determined to be fund-raising by generally accepted 
 accounting principles. 

    Expenses incurred in planning or developing a fund-raising 
 campaign, regardless of whether the expenses are incurred 
 before, during, or after that campaign, constitute fund-raising 
 costs.  

    HIST: 1961 c 309 s 1; 1969 c 112 s 1; 1973 c 762 s 1-4; 1978 c 
 601 s 1-4; 1980 c 516 s 2; 1983 c 75 s 1; 1983 c 289 s 114 subd 
 1; 1984 c 655 art 1 s 92; 1986 c 444; 1987 c 336 s 27 

     309.501 Registered combined charitable organizations. 

    Subdivision 1.    Definitions.  (a) As used in this 
 section, the following terms have the meanings given them.  

    (b) "Registered combined charitable organization" means a 
 federated funding organization: 

    (1) which is tax exempt under section 501(c)3 of the 
 Internal Revenue Code of 1986, as amended through December 31, 
 1992 (hereinafter "Internal Revenue Code"), and to which 
 contributions are deductible under section 170 of the Internal 
 Revenue Code; 

    (2) which exists for purposes other than solely 
 fund-raising; 

    (3) which secures funds for distribution to 14 or more 
 affiliated agencies in a single, annual consolidated effort; 

    (4) which is governed either by a local, independent, 
 voluntary board of directors which represents the broad 
 interests of the public and 90 percent of the directors of the 
 governing board live or work in the community or surrounding 
 area or, if the charitable agencies are solely educational 
 institutions which meet the requirements of paragraph (c), by a 
 national board of directors that has a local advisory board 
 composed of members who live or work in the community or 
 surrounding area; 

    (5) which distributes at least 70 percent of its total 
 campaign income and revenue, plus donor designated amounts 
 raised to its affiliated agencies and to the designated agencies 
 it supports and expends no more than 30 percent of its total 
 income and revenue, plus donor designated amounts raised for 
 management and general costs and fund-raising costs; 

    (6) which distributes at least 70 percent of its total 
 campaign income and revenue to affiliated agencies and 
 designated agencies that are incorporated in Minnesota or 
 headquartered in the service area in which the state employee 
 combined charitable campaign takes place or, if the charitable 
 agencies are solely educational institutions which meet the 
 requirements of paragraph (c), distributes at least 70 percent 
 of the state employee combined charitable campaign income and 
 revenue directly to Minnesota residents using established 
 eligibility criteria; 

    (7) and each designated or affiliated agency supported by 
 the recipient institution devotes substantially all of its 
 activities directly to providing health, welfare, social, or 
 other human services to individuals; 

    (8) and each designated or affiliated agency supported by 
 the recipient institution with funds contributed by state 
 employees through the combined charitable campaign provides all 
 or substantially all of its health, welfare, social, or other 
 human services, in the community and surrounding area in which 
 the state employee combined charitable campaign takes place; 

    (9) and each charitable agency is affiliated with no more 
 than one registered combined charitable organization within the 
 registered combined charitable organization's service area in 
 the state's employee combined charitable campaign; and 

    (10) which has been registered with the commissioner of 
 employee relations in accordance with this section.  

    Registered combined charitable organization includes a 
 charitable organization organized by Minnesota state employees 
 and their exclusive representatives for the purpose of providing 
 grants to nonprofit agencies providing Minnesota residents with 
 food or shelter if the charitable organization meets the 
 requirements of clauses (1), (4), and (5). 

    (c) "Affiliated agency" means a charitable agency that is 
 represented by a federation and has an ongoing relationship with 
 that federation which involves a review and monitoring process 
 to ensure financial, managerial, and programmatic responsibility.

    (d) "Charitable agency" means a governmental agency or an 
 organization (1) which is tax exempt under section 501(c)3 of 
 the Internal Revenue Code; (2) to which contributions are 
 deductible under section 170 of the Internal Revenue Code; and 
 (3) which is in compliance with the provisions of this chapter. 

    (e) "State employees combined charitable campaign" means 
 the annual state campaign whereby a state employee may designate 
 that the employee's contribution to a registered combined 
 charitable organization may be deducted from the pay of the 
 employee for each pay period. 

    Subd. 2.    Designated contributions.  A registered 
 combined charitable organization may offer a state officer or 
 employee the option of designating in writing that the amount 
 deducted in section 16A.134, be designated to any charitable 
 agency, whether or not the charitable agency receives funds from 
 the single, annual consolidated effort.  A registered combined 
 charitable organization which offers this option shall provide a 
 list of charitable agencies receiving funds and the amount each 
 charitable agency receives in the annual report required 
 pursuant to section 309.53.  

    Subd. 3.    Registration.  (a) In order to participate 
 in the state employee combined charitable campaign, a federated 
 funding organization shall apply to the commissioner of employee 
 relations as a registered combined charitable organization on or 
 before June 1, 1993, and in 1994 and thereafter on or before 
 March 1 in order to be eligible to participate in the campaign 
 for that year. 

    (b) A federated funding organization which applies to the 
 commissioner of employee relations shall provide the 
 commissioner with all information the commissioner deems 
 necessary to identify the charitable and tax exempt status of 
 the organization and its compliance with the provisions of this 
 chapter including, but not limited to the following: 

    (1) assurance of tax exempt status for the federated 
 funding organization and each of the charitable agencies 
 identified by the federated funding organization as an 
 affiliated agency; 

    (2) assurance of proper registration with the attorney 
 general of Minnesota to solicit contributions in the state of 
 Minnesota for the federated funding organization and each of the 
 charitable agencies identified by the federated funding 
 organization as an affiliated agency.  A copy of the 
 registration letter must be available upon request; 

    (3) an affidavit signed by a duly constituted officer of 
 the federated funding organization attesting to the fact that 
 the federated funding organization and its affiliated agencies 
 are in compliance with each of the provisions of this section; 

    (4) a list of the board of directors for the federated 
 funding organization which identifies the address for each 
 director; and 

    (5) a fee of $100, or ten percent of the funds raised from 
 state employees in the previous campaign, whichever is less. 

    (c) A registered combined charitable organization shall 
 disclose in its solicitation and its annual report filed under 
 section 309.53:  

    (1) gross dollars received in contributions in the prior 
 year; 

    (2) names of, business addresses, and amount of money 
 distributed to each affiliated charitable agency by the 
 registered combined charitable organization; 

    (3) percentage of gross dollars contributed which was 
 directly received by the charitable agencies; and 

    (4) projected percentage of the contribution to be received 
 by the charitable agencies in the year for which the 
 solicitation is being made.  

    If participating charitable agencies are required to pay 
 any fees to the combined charitable organization, it shall also 
 be disclosed in the solicitation and annual report.  In the 
 annual report the combined charitable organization shall include 
 a list of charitable agencies to which donors specifically 
 designated funds, and the amount designated to each agency.  
 Notwithstanding section 309.53, subdivision 1a, each charitable 
 agency shall file the report required in section 309.53.  The 
 commissioner shall consult with the attorney general to 
 determine if the combined charitable organization and its 
 charitable agencies are in compliance with this chapter.  

    (d) The commissioner shall register or not register the 
 application of an organization within 75 days.  No organization 
 may apply to the commissioner more than once in a calendar 
 year.  An organization whose application is denied has ten 
 calendar days after receiving notice of the denial to appeal the 
 decision or file an amended application correcting the 
 deficiency.  The commissioner shall register or not register the 
 organization within ten calendar days of the submission of the 
 appeal.  If the organization fails to correct the deficiency and 
 registration is denied a second time, the organization may 
 appeal within five calendar days after being notified by the 
 commissioner or the commissioner's designee that the deficiency 
 has not been cured and the organization is not registered.  A 
 hearing shall be scheduled by the commissioner of employee 
 relations and shall be held within 15 calendar days after 
 receiving notice of the appeal.  The provisions of chapter 14 do 
 not apply to the hearing.  The hearing shall be conducted in a 
 manner considered appropriate by the commissioner.  The 
 commissioner's determination following the hearing shall be made 
 within five calendar days after the hearing has been completed.  
 Registered combined charitable organizations shall file the 
 report required in section 309.53.  The commissioner shall 
 notify the commissioner of finance in writing of the decision to 
 register an organization under this section by July 15. 

    (e) An organization whose application as a registered 
 combined charitable organization is denied shall not be eligible 
 to participate in the state employee combined charitable 
 campaign for that year.  Only organizations that are approved 
 may participate in the state employee combined charitable 
 campaign for the year of approval and only contributions 
 authorized during the campaign may be deducted from an 
 employee's pay pursuant to section 16A.134. 

    Subd. 3a.    Related organization.  No two federated 
 funding campaigns that are related organizations, as defined in 
 section 317A.011, subdivision 18, may participate simultaneously 
 in the state employee combined charitable campaign. 

    Subd. 4.    Compliance waiver.  This subdivision applies 
 only to the 1993 state employee combined charitable organization 
 fund drive.  A registered combined charitable organization that 
 participated in the 1992 state employee's combined charitable 
 organization's fund drive but that would not be qualified to 
 participate in future fund drives because it will not satisfy 
 the standards of this section, may certify to the commissioner 
 of employee relations those provisions of subdivision 1 that it 
 fails to meet and the extent of the inability to meet the 
 specified standards, and may request a waiver of compliance.  
 The commissioner shall issue a waiver to the registered combined 
 charitable organization unless the provisions of subdivision 1 
 that the registered combined charitable organization fails to 
 meet is subdivision 1, paragraph (b), clause (1) or (5). 

    To be entitled to a waiver, an organization must apply to 
 the commissioner by the registration dates specified in 
 subdivision 3. 

    HIST: 1983 c 289 s 114 subd 1; 1983 c 355 s 2; 1984 c 655 art 
 1 s 92; 1986 c 444; 1991 c 145 s 1; 1993 c 192 s 86; 1994 c 535 
 s 1,2; 1995 c 235 s 1; 1996 c 268 s 1 

  309.502 Repealed, 1993 c 192 s 110 

  309.51 Repealed, 1973 c 762 s 18 

     309.515 Exemptions. 

    Subdivision 1.    Registration and reporting exemption.  
 Subject to the provisions of subdivisions 2 and 3, sections 
 309.52 and 309.53 shall not apply to any of the following: 

    (a) Charitable organizations: 

    (1) which did not receive total contributions in excess of 
 $25,000, exclusive of the direct cost of prizes given to the 
 public by the charitable organization in connection with lawful 
 gambling conducted in compliance with chapter 349, from the 
 public within or without this state during the accounting year 
 last ended, and 

    (2) which do not plan to receive total contributions in 
 excess of such amount from the public within or without this 
 state during any accounting year, and 

    (3) whose functions and activities, including fund-raising, 
 are performed wholly by persons who are unpaid for their 
 services, and 

    (4) none of whose assets or income inure to the benefit of 
 or are paid to any officer. 

    For purposes of this chapter, a charitable organization 
 shall be deemed to receive in addition to contributions 
 solicited from the public by it, the contributions solicited 
 from the public by any other person and transferred to it.  Any 
 organization constituted for a charitable purpose receiving an 
 allocation from a community chest, united fund or similar 
 organization shall be deemed to have solicited that allocation 
 from the public. 

    (b) A religious society or organization which is exempt 
 from filing a federal annual information return pursuant to 
 Internal Revenue Code, section 6033(a)(2)(A)(i) and (iii), and 
 Internal Revenue Code, section 6033(a)(2)(C)(i).  

    (c) Any educational institution which is under the general 
 supervision of the commissioner of education, the Board of 
 Trustees of the Minnesota State Colleges and Universities, or 
 the University of Minnesota or any educational institution which 
 is accredited by the University of Minnesota or the North 
 Central Association of Colleges and Secondary Schools, or by any 
 other national or regional accrediting association. 

    (d) A fraternal, patriotic, social, educational, alumni, 
 professional, trade or learned society which limits solicitation 
 of contributions to persons who have a right to vote as a 
 member.  The term "member" shall not include those persons who 
 are granted a membership upon making a contribution as the 
 result of a solicitation. 

    (e) A charitable organization soliciting contributions for 
 any person specified by name at the time of the solicitation if 
 all of the contributions received are transferred to the person 
 named with no restrictions on the person's expenditure of it and 
 with no deductions whatsoever. 

    (f) A private foundation, as defined in section 509(a) of 
 the Internal Revenue Code of 1954, which did not solicit 
 contributions from more than 100 persons during the accounting 
 year last ended. 

    Subd. 2.    Limitation.  Where any such group or 
 association or person soliciting for the benefit of such group 
 or association described in subdivision 1, clauses (a) and (d), 
 employs a professional fund-raiser to solicit or assist in the 
 solicitation of contributions, sections 309.52 and 309.53 shall 
 apply and such group or association or person shall file a 
 registration statement as provided in section 309.52 and an 
 annual report as provided in section 309.53. 

    Subd. 3. Repealed, 1987 c 336 s 47 

    HIST: 1973 c 349 s 2; 1973 c 762 s 5; 1975 c 321 s 2; 1978 c 
 601 s 5; 1983 c 284 s 17; 1985 c 248 s 70; 1986 c 444; 1987 c 
 336 s 28; 1989 c 151 s 1; 1996 c 395 s 18; 1998 c 398 art 5 s 
 55; 2003 c 130 s 12 

     309.52 Statement requirement. 

    Subdivision 1.    Filing; contents.  No charitable 
 organization, except as otherwise provided in section 309.515, 
 shall solicit contributions from persons in this state by any 
 means whatsoever unless, prior to any solicitation, there shall 
 be on file with the attorney general upon forms provided by the 
 attorney general, a registration statement containing, without 
 limitation, the following information: 

    (a) Legally established name. 

    (b) Name or names under which it solicits contributions. 

    (c) Form of organization. 

    (d) Date and place of organization. 

    (e) Address of principal office in this state, or, if none, 
 the name and address of the person having custody of books and 
 records within this state. 

    (f) Names and addresses of, and total annual compensation 
 paid to, officers, directors, trustees, and chief executive 
 officer. 

    (g) Federal and state tax exempt status. 

    (h) Denial at any time by any governmental agency or court 
 of the right to solicit contributions. 

    (i) Date on which accounting year of the charitable 
 organization ends. 

    (j) General purposes for which organized. 

    (k) General purposes for which contributions to be 
 solicited will be used. 

    (l) Methods by which solicitation will be made. 

    (m) Copies of contracts between charitable organization and 
 professional fund-raisers relating to financial compensation or 
 profit to be derived by the professional fund-raisers.  Where 
 any such contract is executed after filing of the registration 
 statement, a copy thereof shall be filed within seven days of 
 the date of execution. 

    (n) Board, group or individual having final discretion as 
 to the distribution and use of contributions received. 

    (o) The amount of total contributions received during the 
 accounting year last ended. 

    (p) Such other information as the attorney general may by 
 rule or order require to promote fairness of the solicitation 
 and to assure full and fair disclosure of all material 
 information to the attorney general. 

    Subd. 1a.    Certain charitable organizations.  A 
 charitable organization whose total contributions received 
 during any accounting year are in excess of $25,000, exclusive 
 of the direct cost of prizes given to the public by the 
 charitable organization in connection with lawful gambling 
 conducted in compliance with chapter 349, shall file a 
 registration statement with the attorney general within 30 days 
 after the date on which the organization's total contributions 
 exceeded $25,000, exclusive of the direct cost of prizes given 
 to the public by the charitable organization in connection with 
 lawful gambling conducted in compliance with chapter 349.  The 
 registration shall exist unless revoked by a court of competent 
 jurisdiction, or the attorney general, or as provided in 
 subdivision 7.  This subdivision shall not apply to a charitable 
 organization which had filed a registration statement pursuant 
 to this section for the accounting year last ended or to 
 organizations described in section 309.515, subdivision 1. 

    Subd. 2.    Registration fee and financial statement.  
 The registration statement filed by a charitable organization 
 shall include a registration fee of $25 and a financial 
 statement of the organization's operation for its most recent 12 
 months period immediately preceding the filing of the first 
 registration statement. 

    Subd. 3.    How executed.  The registration statement 
 shall be executed by any two duly constituted officers of the 
 charitable organization who shall acknowledge that it was 
 executed pursuant to resolution of the board of directors or 
 trustees, or if there be no such board, then by its managing 
 group which has approved the content of the registration 
 statement, and shall certify that the board of directors or 
 trustees, or if there be no such board, its managing group, have 
 assumed, and will continue to assume responsibility for 
 determining matters of policy and have supervised, and will 
 continue to supervise the finances of the charitable 
 organization. 

    Subd. 4.    Affiliate filing on behalf of parent.  Where 
 any chapter, branch, area office or similar affiliate of a 
 charitable organization is supervised and controlled by a parent 
 organization located within or outside the state, the affiliate 
 may file a registration statement on behalf of the parent 
 organization in addition to or as part of its own registration 
 statement, or the parent organization may file a registration 
 statement on behalf of the affiliate in addition to or as part 
 of its own registration statement. 

    Subd. 5.  Repealed, 1978 c 601 s 29 

    Subd. 6.  Repealed, 1978 c 601 s 29 

    Subd. 7.    Failure to file.  In no event shall the 
 registration of a charitable organization continue in effect 
 after the date such organization should have filed, but has 
 failed to file an annual report, including the payment of all 
 required fees, in accordance with the requirements of section 
 309.53, and such organization, if in default under such section, 
 shall not be eligible to file a new registration statement until 
 it shall have filed the required annual report with the attorney 
 general. 

    Subd. 8.  Repealed, 1978 c 601 s 29 

    Subd. 9.    Special purpose organization.  A charitable 
 organization that is organized and operated primarily for the 
 purpose of offering and paying rewards for information leading 
 to the apprehension or conviction of criminal suspects and that 
 satisfies subdivision 10 shall not be required to include in its 
 registration statement the information described in subdivision 
 1, clauses (f) and (o), or the financial statement described in 
 subdivision 2, and notwithstanding subdivision 3, its 
 registration statement may be executed by the mayor, city 
 manager, or chief of police of the municipality, if any, with 
 which the organization is primarily associated.  

    Subd. 10.    Application of subdivision 9 to certain 
 organizations.  Subdivision 9 applies to an organization whose 
 financial statement described in subdivision 2 has been audited 
 and reported on by a certified public accountant and made 
 available with the accountant's report for inspection by its 
 members and by the mayor, city manager, or chief of police of 
 the municipality, if any, with which the organization is 
 primarily associated, and whose registration statement contains 
 a certificate of compliance with this subdivision.  

    HIST: 1961 c 309 s 3; 1969 c 112 s 3-6; 1969 c 1129 art 4 s 4; 
 1973 c 762 s 6; 1976 c 239 s 90; 1978 c 601 s 6,7; 1982 c 585 s 
 1,2; 1987 c 336 s 29,30,46; 1992 c 503 s 1; 1995 c 235 s 2,3 

     309.53 Annual report. 

    Subdivision 1.    Required filing.  Every charitable 
 organization that is 
 required to file or that files a registration statement pursuant 
 to section 309.52 shall file an annual report with the attorney 
 general upon forms provided by the attorney general or on forms 
 identical thereto on or before July 15 of each year if its books 
 are kept on a calendar year basis, or on or before the 15th day 
 of the seventh month following the close of its fiscal year if 
 its books are kept on a fiscal year basis.  For cause shown the 
 attorney general may extend the time for filing the annual 
 report for a period not to exceed four months. 

    Subd. 1a. Repealed, 1995 c 235 s 17 

    Subd. 2.    Contents; effect of filing and failure to file.  
 Such annual report shall include a financial 
 statement covering the immediately preceding 12-month period of 
 operation, shall be executed by any two duly constituted 
 officers of the charitable organization, and shall be executed 
 pursuant to resolution of the board of directors or trustees, or 
 if there be no such board, then by its managing group which has 
 approved the content of the annual report.  Except as provided 
 in section 309.55, subdivision 1, the annual report shall also 
 include a copy of all tax or information returns, including all 
 schedules and amendments, submitted by the charitable 
 organization to the Internal Revenue Service for the period 
 covered by the annual report except any schedules of 
 contributors to the organization.  

    A charitable organization which files the annual report 
 required under this subdivision with the attorney general is not 
 required to file the tax return with the commissioner of 
 revenue.  An organization which fails to file the annual report 
 on or before the date required or allowed under this section 
 shall pay a late fee of $50.  This late fee shall be in addition 
 to all other fees, costs, and penalties which may be imposed 
 pursuant to this section or section 309.57.  

    Subd. 3.    Financial statement requirements.  The financial 
 statement shall include a balance 
 sheet, statement of income and expense, and statement of 
 functional expenses, shall be consistent with forms furnished by 
 the attorney general, and shall be prepared in accordance with 
 generally accepted accounting principles so as to make a full 
 disclosure of the following, including necessary allocations 
 between each item and the basis of such allocations: 

    (a) total receipts and total income from all sources; 

    (b) cost of management and general; 

    (c) program services; 

    (d) cost of fund-raising; 

    (e) cost of public education; 

    (f) funds or properties transferred out of state, with 
 explanation as to recipient and purpose; 

    (g) total net amount disbursed or dedicated within this 
 state, broken down into total amounts disbursed or dedicated for 
 each major purpose, charitable or otherwise; 

    (h) names of professional fund-raisers used during the 
 accounting year and the financial compensation and profit 
 resulting to each professional fund-raiser; and 

    (i) a list of the five highest paid directors, officers, 
 and employees of the organization and its related organizations, 
 as that term is defined by section 317A.011, subdivision 18, 
 that receive total compensation of more than $50,000, together 
 with the total compensation paid to each.  Total compensation 
 shall include salaries, fees, bonuses, fringe benefits, 
 severance payments, and deferred compensation paid by the 
 charitable organization and all related organizations as that 
 term is defined by section 317A.011, subdivision 18.  

    Unless otherwise required by this subdivision, the 
 financial statement need not be certified. 

    A financial statement of a charitable organization which 
 has received total revenue in excess of $350,000 for the 12 
 months of operation covered by the statement shall be 
 accompanied by an audited financial statement prepared in 
 accordance with generally accepted accounting principles that 
 has been examined by an independent certified public accountant 
 for the purpose of expressing an opinion.  In preparing the 
 audit the certified public accountant shall take into 
 consideration capital, endowment or other reserve funds, if any, 
 controlled by the charitable organization.  

    Subd. 3a.    Filing of federal tax return.  The federal tax 
 return may be filed in lieu of 
 other financial statements if it is prepared in accordance with 
 generally accepted accounting principles and meets the 
 requirements for financial statements set forth in subdivisions 
 2, 3, and 4.  

    Subd. 4.    Registered parent organization.  Where a 
 registration statement has been filed by 
 a parent organization or affiliate as provided in section 
 309.52, subdivision 4, the registered parent organization may 
 file the annual report required under this section on behalf of 
 the chapter, branch, area office, similar affiliate, or person 
 in addition to or as part of its own report or the registered 
 affiliate may file the annual report required under this section 
 on behalf of the parent organization in addition to or as part 
 of its own report.  The accounting information required under 
 this section shall be set forth separately and not in 
 consolidated form with respect to every chapter, branch, area 
 office, similar affiliate, or person within the state which 
 raises or expends more than $25,000, exclusive of the direct 
 cost of prizes given to the public by the charitable 
 organization in connection with lawful gambling conducted in 
 compliance with chapter 349.  The attorney general may permit 
 any chapter, branch, area office, similar affiliate, or person 
 to file a consolidated statement with any other chapter, branch, 
 area office, similar affiliate, or person or parent organization 
 if the interests of the charitable beneficiaries will not be 
 prejudiced thereby and separate accounting information is not 
 required for proper supervision. 

    Subd. 5.  Repealed, 1978 c 601 s 29 

    Subd. 6.    Special purpose organization.  A charitable 
 organization that is organized and 
 operated primarily for the purpose of offering and paying 
 rewards for information leading to the apprehension or 
 conviction of criminal suspects and that satisfies subdivision 7 
 shall not be required to include in its annual report the 
 financial statement described in subdivisions 2 and 3, and 
 notwithstanding subdivision 2, its annual report may be executed 
 by the mayor, city manager, or chief of police of the 
 municipality, if any, with which the organization is primarily 
 associated.  

    Subd. 7.    Application of subdivision 6 to certain 
 organizations.  Subdivision 6 applies to an organization whose 
 financial statement described in subdivisions 2 and 3 has been 
 audited and reported on by a certified public accountant and 
 made available with the accountant's report for inspection by 
 its members and by the mayor, city manager, or chief of police 
 of the municipality, if any, with which the organization is 
 primarily associated, and whose annual report contains a 
 certificate of compliance with this subdivision.  

    Subd. 8.    Reregistration fee.  A reregistration fee of $25 
 shall be paid by 
 every charitable organization submitting the annual report 
 required by this section.  

    HIST: 1961 c 309 s 4; Ex1967 c 49 s 2; 1969 c 112 s 7-10; 1969 
 c 1129 art 4 s 4; 1973 c 762 s 7; 1978 c 601 s 8-10; 1981 c 148 
 s 1; 1982 c 585 s 3,4; 1983 c 284 s 18,19; 1983 c 289 s 114 subd 
 1; 1983 c 301 s 184,185; 1984 c 655 art 1 s 92; 1987 c 336 s 
 31-34,46; 1994 c 465 art 1 s 37; 1995 c 235 s 4-7; 1996 c 384 s 
 3; 2000 c 302 s 1; 2001 c 45 s 1,2 

     309.531 Registration of professional fund-raisers. 

    Subdivision 1.    General requirements.  No person shall act as 
 a professional 
 fund-raiser unless registered with the attorney general.  The 
 registration statement must be in writing, under oath, in the 
 form prescribed by the attorney general and must be accompanied 
 by a registration fee of $200.  Each registration is effective 
 for a period of not more than 12 months and in any event expires 
 on April 30 next following the date of registration.  The 
 registration may be renewed for additional one-year periods on 
 application and payment of all required fees.  A professional 
 fund-raiser failing to register on the date required by this 
 section or failing to file the financial report required by this 
 section on or before the date provided shall pay a late fee of 
 $300.  This late fee shall be in addition to all other fees, 
 costs, and penalties which may be imposed pursuant to this 
 section or section 309.57. 

    Subd. 2.    Required registration statement.  The registration 
 statement of the professional 
 fund-raiser shall consist of the following:  

    (a) If the professional fund-raiser at any time has custody 
 of or access to contributions from a solicitation, or if any 
 person the professional fund-raiser employs, obtains, or engages 
 has custody of or access to contributions from a solicitation, 
 the registration statement shall include a bond, in which the 
 professional fund-raiser shall be the principal obligor.  The 
 bond shall be in the sum of $20,000, with one or more 
 responsible sureties whose liability in the aggregate as the 
 sureties will at least equal that sum.  In order to maintain the 
 registration, the bond shall be in effect for the full term of 
 the registration.  The bond, which may be in the form of a rider 
 to a larger blanket liability bond, shall run to the state and 
 to any person who may have a cause of action against the 
 principal obligor of the bond for any liabilities resulting from 
 the obligor's conduct of any activities subject to sections 
 309.50 to 309.61 or arising out of a violation of the statutes 
 or a rule adopted under the statutes. 

    (b) If the professional fund-raiser, or any person the 
 professional fund-raiser employs, procures, or engages, solicits 
 in this state, the registration statement shall include a 
 completed "solicitation notice" on a form provided by the 
 attorney general.  The solicitation notice shall include a copy 
 of the contract described in paragraph (c), the projected dates 
 when soliciting will commence and terminate, the location and 
 telephone number from where the solicitation will be conducted, 
 the name and residence address of each person responsible for 
 directing and supervising the conduct of the campaign, a 
 statement as to whether the professional fund-raiser will at any 
 time have custody of contributions, and a description of the 
 charitable program for which the solicitation campaign is being 
 carried out.  The charitable organization on whose behalf the 
 professional fund-raiser is acting shall certify that the 
 solicitation notice and accompanying material are true and 
 complete to the best of its knowledge. 

    (c) The professional fund-raiser shall also include, as 
 part of the registration statement, a copy of the contract 
 between the charitable organization and the professional fund-raiser.  
 The contract shall: 

    (1) be in writing; 

    (2) contain information as will enable the attorney general 
 to identify the services the professional fund-raiser is to 
 provide, including whether the professional fund-raiser will at 
 any time have custody of contributions; and 

    (3) if the professional fund-raiser or any person the 
 professional fund-raiser employs, procures, or engages, directly 
 or indirectly, solicits in this state, the contract shall 
 disclose the percentage or a reasonable estimate of the 
 percentage of the total amount solicited from each person which 
 shall be received by the charitable organization for charitable 
 purposes.  

    The stated percentages required by this section and section 
 309.556, subdivision 2, shall exclude any amount which the 
 charitable organization is to pay as expenses of the 
 solicitation campaign, including the cost of merchandise or 
 services sold or events staged.  

    (d) The registration statement shall also include the 
 financial report for previous campaigns conducted by the 
 professional fund-raiser in this state as set forth in 
 subdivision 4.  

    Subd. 3.    Solicitations on behalf of charity; written 
 authorization.  No professional fund-raiser shall use the name of 
 or solicit on behalf of any charitable organization unless such 
 solicitor has written authorization from two officers of such 
 organization, a copy of which shall be filed with the attorney 
 general.  Such written authorization shall conform to the 
 requirements of the contract described in subdivision 2, clause 
 (c).  

    Subd. 4.    Solicitation campaign; financial report.  Within 90 
 days after a solicitation campaign has 
 been completed, and 90 days following the anniversary of the 
 commencement of a solicitation campaign lasting more than one 
 year, the professional fund-raiser who solicited contributions 
 in this state in conjunction with a charitable organization 
 shall file with the attorney general a financial report for the 
 campaign, including gross revenue and an itemization of all 
 expenses incurred.  The report shall be completed on a form 
 prescribed by the attorney general.  The report shall be signed 
 by an authorized official of the professional fund-raiser and an 
 authorized official from the charitable organization and they 
 shall certify, under oath, that it is true to the best of their 
 knowledge.  

    HIST: 1973 c 762 s 8; 1987 c 336 s 35; 1987 c 358 s 115; 1989 
 c 151 s 2; 1994 c 465 art 3 s 10; 1995 c 235 s 8,9 

  309.532 Repealed, 1987 c 336 s 47 

     309.533 Investigations. 

    Subdivision 1.    Attorney general investigation powers.  The 
 attorney general: 

    (a) may make public or private investigations within or 
 outside the state as deemed necessary by the attorney general to 
 determine whether any person has violated or is about to violate 
 any provision of sections 309.50 to 309.61 or any rule or order 
 thereunder, or to aid in the enforcement of sections 309.50 to 
 309.61 in the prescribing of rules and forms thereunder, and may 
 publish information, concerning the violation of sections 309.50 
 to 309.61 or any rule or order thereunder. 

    (b) may require or permit any person to file a statement in 
 writing, under oath or otherwise as the attorney general 
 determines, as to all facts and circumstances concerning the 
 matter being investigated. 

    Subd. 2. Repealed, 1987 c 336 s 47 

    Subd. 3. Repealed, 1987 c 336 s 47 

    Subd. 4. Repealed, 1987 c 336 s 47 

    Subd. 5.    Attorney general discovery powers.  In connection 
 with an investigation under this 
 section, the attorney general may obtain discovery from any 
 person regarding any matter, fact, or circumstance, not 
 privileged, that is relevant to the subject matter involved in 
 the investigation, in accordance with the provisions of section 
 8.31.  

    HIST: 1978 c 601 s 11; 1986 c 444; 1987 c 336 s 36,46 

  309.534 Repealed, 1987 c 336 s 47 

     309.54 Records. 

    Subdivision 1.    Filed documents are public records.  
 Registration statements, annual reports, 
 and other documents required to be filed shall become public 
 records in the Office of the Attorney General.  

    Subd. 2.    Inspection by attorney general.  Every person 
 subject to sections 309.50 to 309.61 
 shall maintain, for not less than three years from the date of 
 preparation, accurate and detailed books and records to provide 
 the information required by sections 309.50 to 309.61.  All such 
 books and records shall be open to inspection at all reasonable 
 times by the attorney general.  

    Subd. 3.    Retention of books and records.  Every charitable 
 organization which is required 
 to file an annual report under section 309.53 shall keep and 
 maintain, at the place designated in its registration statement, 
 the original books and records, or true copies thereof, 
 pertaining to all money or other property collected from 
 residents of this state and to the disbursement of such money or 
 property.  Such books and records shall be preserved for a 
 period of not less than three years from the date of preparation 
 thereof.  

    HIST: 1961 c 309 s 5; 1969 c 112 s 11,12; 1969 c 1129 art 4 s 
 4; 1973 c 762 s 9; 1987 c 336 s 37; 1995 c 235 s 10 

     309.55 Prohibited practices. 

    Subdivision 1.    Use of names.  No charitable organization or 
 person acting 
 for a charitable organization shall use the name of any other 
 person (except that of an officer, director or trustee of the 
 charitable organization by or for which contributions are being 
 solicited) in public solicitation literature without the written 
 consent of such other person. Nothing herein contained shall 
 prevent the publication of names of contributors, without their 
 written consent, in an annual or other periodic report issued by 
 a charitable organization for the purpose of reporting to its 
 membership.  Nothing in section 309.52 or 309.53 shall require 
 the disclosure in any registration statement or annual report of 
 the names of individual contributors and the amount contributed 
 by each one individually. 

    Subd. 2.    Confusing or misleading names, symbols, or statements. 
  No charitable organization soliciting 
 contributions shall use a name, symbol or statement so closely 
 related or similar to that used by another charitable 
 organization or governmental agency that the use thereof would 
 tend to confuse or mislead the public. 

    Subd. 3.    Misrepresentation of registration.  Registration 
 under sections 309.50 to 309.61 
 shall not be deemed to constitute an endorsement by the state of 
 Minnesota of the charitable organizations so registered, and no 
 person shall directly or indirectly misrepresent the 
 registration hereunder to any donor or prospective donor. 

    Subd. 4.    Use of uniformed state or local personnel.  No 
 charitable organization and no person acting 
 on behalf of a charitable organization shall use any uniformed 
 personnel of any local, state or federal agency or department to 
 solicit contributions.  This subdivision shall not apply to 
 firefighters who solicit contributions in uniform. 

    Subd. 5.    False or deceptive practices.  No charitable 
 organization and no person acting 
 on behalf of a charitable organization shall use or employ any 
 fraud, false pretense, false promise, misrepresentation, 
 misleading statement, misleading name, mark or identification, 
 or deceptive practice, method or device, with the intent that 
 others should rely thereon in connection with any charitable 
 solicitation, including any such actions or omissions designed 
 to confuse or mislead a person to believe that such organization 
 is another organization having the same or like purposes; or to 
 believe that the funds being solicited are or will be used for 
 purposes and programs conducted within or for persons located 
 within the state of Minnesota when such is not the case; or to 
 otherwise present purposes and uses of the funds which are not 
 as provided within the purposes and uses filed upon registration 
 of said organization under this chapter, or if no such 
 registration has been filed, then as provided under the 
 exemption of said organization from federal and state income 
 taxes as an organization formed and operating for charitable 
 purposes as defined herein. 

    Subd. 6.    Sale of contributor list.  No person shall, either 
 as an individual or as 
 agent, officer or employee of a charitable organization sell or 
 otherwise furnish for a consideration to any other person any 
 list of contributors unless the contributor has consented to the 
 transaction. 

    Subd. 7.    Soliciting organization payments to unregistered 
 organization.  No moneys solicited within the state by any 
 organization subject to this chapter shall be paid or 
 contributed by the soliciting organization to any other 
 charitable organization not registered under this chapter by 
 which it is controlled or with which it is affiliated by 
 contract, franchise or otherwise, whose purposes, policies, 
 articles or bylaws are in conflict with those of the soliciting 
 organization upon any material matter unless such other 
 organization to which such moneys are to be paid or delivered 
 shall agree to be bound by the purposes, policies, articles and 
 bylaws of the soliciting organization. 

    HIST: 1961 c 309 s 6; 1973 c 762 s 10; 1974 c 367 s 1; 1975 c 
 386 s 1,2; 1977 c 429 s 63; 1986 c 444; 1987 c 336 s 38 

  309.555 Repealed, 1987 c 336 s 47 

     309.556 Public disclosure requirements. 

    Subdivision 1.    Identity of organization; percentage of 
 deductibility; description of program.  Prior to orally 
 requesting a contribution or contemporaneously with a written 
 request for a contribution, the following information shall be 
 clearly disclosed: 

    (a) the name and location by city and state of each 
 charitable organization on behalf of which the solicitation is 
 made; 

    (b) the tax deductibility of the contribution; and 

    (c) a description of the charitable program for which the 
 solicitation campaign is being carried out; and, if different, a 
 description of the programs and activities of the organization 
 on whose behalf the solicitation campaign is being carried out.  

    If the solicitation is made by direct personal contact, the 
 required information shall also be disclosed prominently on a 
 written document which shall be exhibited to the person 
 solicited.  If the solicitation is made by radio, television, 
 letter, telephone, or any other means not involving direct 
 personal contact, the required information shall be clearly 
 disclosed in the solicitation. 

    Subd. 2.    Identity of professional fund-raiser.  In 
 addition to the disclosures required by subdivision 1, any 
 professional fund-raiser soliciting contributions in this state 
 shall also disclose the name of the professional fund-raiser as 
 on file with the attorney general and that the solicitation is 
 being conducted by a "professional fund-raiser."  The 
 disclosures required by this subdivision shall be given in the 
 same manner as the disclosures required by subdivision 1. 

    HIST: 1973 c 762 s 12; 1984 c 527 s 1; 1987 c 336 s 39; 1989 c 
 151 s 3; 1995 c 235 s 11 

     309.56 Service of process. 

    Subdivision 1.    Manner.  Any charitable organization or 
 professional 
 fund-raiser which solicits contributions in this state, but does 
 not maintain an office within the state shall be subject to 
 service of process, as follows: 

    (a) By service thereof on its registered agent within the 
 state, or if there be no such registered agent, then upon the 
 person, if any, who has been designated in the registration 
 statement as having custody of books and records within this 
 state; where service is effected upon the person so designated 
 in the registration statement a copy of the process shall, in 
 addition, be mailed to the charitable organization or 
 professional fund-raiser at its last known address; 

    (b) When a charitable organization or professional 
 fund-raiser has solicited contributions in this state, but 
 maintains no office within the state, has no registered agent 
 within the state, and no designated person having custody of its 
 books and records within the state, or when a registered agent 
 or person having custody of its books and records within the 
 state cannot be found as shown by the return of the sheriff of 
 the county in which such registered agent or person having 
 custody of books and records has been represented by the 
 charitable organization or professional fund-raiser as 
 maintaining an office, service may be made as in any other civil 
 suit, or in the manner provided by section 5.25, or in a manner 
 as the court may direct. 

    Subd. 2.    Consent to service.  The solicitation of any 
 contribution within this 
 state shall be deemed to be the agreement of the charitable 
 organization or professional fund-raiser that any process 
 against it which is so served in accordance with the provisions 
 of this section shall be of the same legal force and effect as 
 if served personally within this state. 

    HIST: 1961 c 309 s 7; 1969 c 1129 art 4 s 4; 1973 c 762 s 13; 
 1978 c 601 s 14; 1978 c 674 s 60; 1986 c 444; 1987 c 336 s 40; 
 1995 c 128 art 1 s 10 

     309.57 District court jurisdiction, penalties, 
  enforcement. 

    Subdivision 1.    General.  Upon the application of the 
 attorney general the district court is vested with jurisdiction 
 to restrain, enjoin, and redress violations of sections 309.50 
 to 309.61.  The court may make any necessary order or judgment 
 including, but not limited to, injunctions, restitution, 
 appointment of a receiver for the defendant or the defendant's 
 assets, suspension of the defendant's registration, awards of 
 reasonable attorney fees, and costs of investigation and 
 litigation, and may award to the state civil penalties up to 
 $25,000 for each violation of sections 309.50 to 309.61.  In 
 ordering injunctive relief, the attorney general shall not be 
 required to establish irreparable harm but only a violation of 
 statute or that the requested order promotes the public 
 interest.  The court may, as appropriate, enter a consent 
 judgment or decree without the finding of illegality. 

    Subd. 2.    Assurance of discontinuance.  The attorney 
 general may accept an assurance of discontinuance of any method, 
 act, or practice in violation of sections 309.50 to 309.61 from 
 any person alleged to be engaged or to have been engaged in the 
 method, act, or practice.  The assurance may, among other terms, 
 include a stipulation for the voluntary payment by the person of 
 the costs of investigation, or of an amount to be held in escrow 
 pending the outcome of an action or as restitution to aggrieved 
 persons, or both.  Any assurance of discontinuance shall be in 
 writing and be filed with the district court of the county of 
 the violator's residence or principal place of business or in 
 Ramsey County.  An assurance shall not be considered an 
 admission of a violation for any purpose.  Failure to comply 
 with the assurance of discontinuance shall be punishable as 
 contempt.  

    HIST: 1961 c 309 s 8; 1987 c 336 s 41; 1989 c 151 s 4 

  309.58 Repealed, 1987 c 336 s 47 

     309.581 Violations; penalties. 

    Any person who willfully and knowingly violates any 
 provision of sections 309.50 to 309.61, or who willfully and 
 knowingly gives false information to the attorney general in 
 statements, reports, or contracts required to be filed by 
 sections 309.50 to 309.61 shall be guilty of a misdemeanor. 

    HIST: 1969 c 112 s 14; 1969 c 1129 art 4 s 4; 1976 c 2 s 123; 
 1987 c 336 s 46 

     309.582 Consultants.  

    The attorney general may retain as consultants such 
 accountants or other experts as the administration of this 
 chapter may require.  

    HIST: 1969 c 112 s 15 

  309.583 Repealed, 1976 c 2 s 124 

     309.59 Construction; powers of attorney general.  

    Sections 309.50 to 309.61 shall not be construed to limit 
 or to restrict the exercise of the powers or the performance of 
 the duties of the attorney general which the attorney general 
 otherwise is authorized to exercise or perform under any other 
 provision of law.  

    HIST: 1961 c 309 s 10; 1986 c 444 

     309.591 Rulemaking power.  

    The attorney general may promulgate such rules as are 
 reasonably necessary to carry out and make effective the 
 provisions and purposes of this chapter.  

    HIST: 1973 c 762 s 15; 1980 c 516 s 2; 1983 c 289 s 114 subd 
 1; 1984 c 655 art 1 s 92; 1987 c 336 s 46 

     309.60 Reciprocal agreements, other states. 

    The attorney general may enter into reciprocal agreements 
 with a like authority of any other state or states for the 
 purpose of exchanging information made available to the attorney 
 general or to such other like authority. 

    HIST: 1961 c 309 s 11; 1969 c 1129 art 4 s 4; 1973 c 762 s 16; 
 1987 c 336 s 46 

     309.61 Severability.  

    If any provision of sections 309.50 to 309.61 or the 
 application thereof to any person or circumstance is held 
 invalid the invalidity shall not affect other provisions or 
 application of said sections which can be given effect without 
 the invalid provision or application, and to this end the 
 provisions of said sections are severable.  

    HIST: 1961 c 309 s 12 

MANAGEMENT OF INSTITUTIONAL FUNDS

     309.62 Uniform Management of Institutional Funds Act; 
  definitions.  

    Subdivision 1.    Scope.  For the purposes of sections 
 309.62 to 309.68, the following terms shall have the meanings 
 here given them.  

    Subd. 2.    Institution.  "Institution" means an 
 incorporated or unincorporated organization organized and 
 operated exclusively for educational, religious, charitable, or 
 other eleemosynary purposes, or a governmental organization to 
 the extent that it holds funds exclusively for any of these 
 purposes.  

    Subd. 3.    Institutional fund.  "Institutional fund" 
 means a fund held by an institution for its exclusive use, 
 benefit, or purposes, but does not include (a) a fund held for 
 an institution by a trustee that is not an institution or (b) a 
 fund in which a beneficiary that is not an institution has an 
 interest, other than possible rights that could arise upon 
 violation or failure of the purposes of the fund.  

    Subd. 4.    Endowment fund.  "Endowment fund" means an 
 institutional fund, or any part thereof, not wholly expendable 
 by the institution on a current basis under the terms of the 
 applicable gift instrument. 

    Subd. 5.    Historic dollar value.  "Historic dollar 
 value" means the aggregate fair value in dollars of (a) an 
 endowment fund at the time it became an endowment fund, (b) each 
 subsequent donation to the fund at the time it is made, and (c) 
 each accumulation made pursuant to a direction in the applicable 
 gift instrument at the time the accumulation is added to the 
 fund.  The determination of historic dollar value made in good 
 faith by the institution is conclusive.  

    Subd. 6.    Gift instrument.  "Gift instrument" means a 
 will, deed, grant, conveyance, agreement, memorandum, writing, 
 or other governing document, including the terms of any 
 institutional solicitations from which an institutional fund 
 resulted, under which property is transferred to or held by an 
 institution as an institutional fund.  

    HIST: 1973 c 313 s 1 

     309.63 Appropriation of appreciation.  

    The governing board may appropriate for expenditure for the 
 uses and purposes for which an endowment fund is established so 
 much of the net appreciation, realized and unrealized, in the 
 fair value of the assets of an endowment fund over the historic 
 dollar value of the fund as is prudent under the standard 
 established by section 309.67.  This section does not limit the 
 authority of the governing board to expend funds as permitted 
 under other law, the terms of the applicable gift instrument, or 
 the charter of the institution.  

    HIST: 1973 c 313 s 2 

     309.64 Rule of construction.  

    Section 309.63 does not apply if the applicable gift 
 instrument indicates the donor's intention that net appreciation 
 shall not be expended.  A restriction upon the expenditure of 
 net appreciation may not be implied from a designation of a gift 
 as an endowment, or from a direction or authorization in the 
 applicable gift instrument to use only "income," "interest," 
 "dividends," or "rents, issues or profits," or "to preserve the 
 principal intact," or a direction which contains other words of 
 similar import.  This rule of construction applies to gift 
 instruments executed or in effect before or after August 1, 1973.

    HIST: 1973 c 313 s 3 

     309.65 Investment authority.  

    In addition to an investment otherwise authorized by law or 
 by the applicable gift instrument, and without restriction to 
 investments a fiduciary may make, the governing board, subject 
 to any specific limitations set forth in the applicable gift 
 instrument or in the applicable law other than law relating to 
 investments by a fiduciary, may: 

    (1) invest and reinvest an institutional fund in any real 
 or personal property deemed advisable by the governing board, 
 whether or not it produces a current return, including 
 mortgages, stocks, bonds, debentures, and other securities of 
 profit or nonprofit corporations, shares in or obligations of 
 associations, partnerships, or individuals, and obligations of 
 any government or subdivision or instrumentality thereof; 

    (2) retain property contributed by a donor to an 
 institutional fund for as long as the governing board deems 
 advisable; 

    (3) include all or any part of an institutional fund in any 
 pooled or common fund maintained by the institution; and 

    (4) invest all or any part of an institutional fund in any 
 other pooled or common fund available for investment, including 
 shares or interests in regulated investment companies, mutual 
 funds, common trust funds, investment partnerships, real estate 
 investment trusts, or similar organizations in which funds are 
 commingled and investment determinations are made by persons 
 other than the governing board.  

    HIST: 1973 c 313 s 4 

     309.66 Delegation of investment management.  

    Except as otherwise provided by the applicable gift 
 instrument or by applicable law relating to governmental 
 institutions or funds, the governing board may (1) delegate to 
 its committees, officers or employees of the institution or the 
 fund, or agents, including investment counsel, the authority to 
 act in place of the board in investment and reinvestment of 
 institutional funds, (2) contract with independent investment 
 advisors, investment counsel or managers, banks, or trust 
 companies, so to act, and (3) authorize the payment of 
 compensation for investment advisory or management services.  

    HIST: 1973 c 313 s 5 

     309.67 Standard of conduct. 

    In the administration of the powers to appropriate 
 appreciation, to make and retain investments, and to delegate 
 investment management of institutional funds, members of a 
 governing board shall discharge their duties in the manner 
 provided in section 317A.251.  In so doing they shall consider 
 long and short term needs of the institution in carrying out its 
 educational, religious, charitable, or other eleemosynary 
 purposes, its present and anticipated financial requirements, 
 expected total return on its investments, price level trends, 
 and general economic conditions.  

    HIST: 1973 c 313 s 6; 1989 c 304 s 133 

     309.68 General contract regulation.  

    Subdivision 1.    Donor consent required.  With the written 
 consent of the donor, the 
 governing board may release, in whole or in part, a restriction 
 imposed by the applicable gift instrument on the use or 
 investment of an institutional fund.  

    Subd. 2.    Governing board application for relief.  If written 
 consent of the donor cannot be 
 obtained by reason of death, disability, unavailability, or 
 impossibility of identification, the governing board may apply 
 in the name of the institution to the district court for release 
 of a restriction imposed by the applicable gift instrument on 
 the use or investment of an institutional fund.  The attorney 
 general shall be notified of the application and shall be given 
 an opportunity to be heard.  If the court finds that the 
 restriction is obsolete, inappropriate, or impracticable, it may 
 by order release the restriction in whole or in part.  A release 
 under this subsection may not change an endowment fund to a fund 
 that is not an endowment fund.  

    Subd. 3.    Effect.  A release under this section may not allow 
 a fund 
 to be used for purposes other than the educational, religious, 
 charitable, or other eleemosynary purposes of the institution 
 affected.  

    Subd. 4.    Application.  This section does not limit the 
 application of 
 the doctrine of cy pres.  

    HIST: 1973 c 313 s 7; 1986 c 444 

     309.69 Severability.  

    If any provision of sections 309.62 to 309.71 or the 
 application thereof to any person or circumstances is held 
 invalid, the invalidity shall not affect other provisions or 
 applications of sections 309.62 to 309.71 which can be given 
 effect without the invalid provision or application, and to this 
 end the provisions of sections 309.62 to 309.71 are declared 
 severable.  

    HIST: 1973 c 313 s 8 

     309.70 Uniformity of application and construction.  

    Sections 309.62 to 309.71 shall be so applied and construed 
 as to effectuate its general purpose to make uniform the law 
 with respect to the subject of sections 309.62 to 309.71 among 
 those states which enact it.  

    HIST: 1973 c 313 s 9 

     309.71 Citation.  

    Sections 309.62 to 309.71 may be cited as the "Uniform 
 Management of Institutional Funds Act."  

    HIST: 1973 c 313 s 10 

ACQUIRING INTERESTS IN INSURANCE

     309.72 Acquisition of interests in insurance. 

    An organization described in section 170(c) of the Internal 
 Revenue Code of 1986, as amended through December 31, 1991, may 
 purchase, accept, or otherwise acquire an interest in a life 
 insurance policy as beneficiary or owner, as provided in section 
 61A.073. 

    HIST: 1992 c 483 s 3