AUGUSTA — A bill proposed in response to a state law that temporarily shut down Augusta’s Red Barn restaurant after a series of fundraisers earned the support of the attorney general and others Thursday.
The measure, sponsored by Rep. Lori Fowle, D-Vassalboro, would eliminate state regulation and licensing requirements for nonprofit fundraisers, unless the person raising the money is being paid.
Attorney General Janet Mills said she is “vigorously in support of this bill,” in testimony before the Legislature’s Labor, Commerce, Research, and Economic Development Committee.
“When the Red Barn incident came to my attention, and I met with the owner and saw the plight she was in, and I saw the good work her business does, I thought something must be wrong with the law if someone in my department thinks there is a violation here,” Mills said
The Red Barn has raised $635,000 for local people in need and nonprofit organizations over the last five years. That is something that should be encouraged, not directed to halt, Mills said.
A letter from Mills’ office — received by Red Barn owner Laura Benedict the day before Thanksgiving, as she was helping to prepare a free community Thanksgiving Dinner that fed some 600 people — raised the issue that forced the restaurant to stop hosting its regular Monday night fundraisers.
The letter, from Assistant Attorney General Michael Miller said that state law requires “most entities that are soliciting contributions from the public for a charitable purpose to be licensed with the Office of Professional and Occupational Regulation.”
It went on to direct the restaurant to “cease engaging in solicitation as a charitable organization until you become licensed as a charitable organization or show why you do not need to be licensed as such.”
Fowle’s bill would amend the state’s Charitable Solicitations Act to limit its application to only professional fund raisers, who solicit funds from the public on behalf of a charitable organization for money or other remuneration. The bill would exclude from regulation people, businesses, and organizations soliciting donations without getting paid to do so.
In response to the letter from the attorney general’s office, Red Barn created the Red Barn Cares Foundation, a fundraising arm of the restaurant.
Roger Pomerleau, a local businessman and member of the foundation, told lawmakers that the Red Barn did not receive money from its fundraising, was not reimbursed for the cost of the food it served and gave all the proceeds to the person or organization for which funds were being raised.
“(Red Barn owner Benedict) donates all the food, then matches that with her own money besides,” Pomerleau said. “She gives 100 percent (to the beneficiary of each fundraiser).”
Pomerleau said the Red Barn Cares Foundation hopes to hold sessions with other small businesses across the state, teaching them how to hold fundraisers to benefit people and organizations in their communities, while indirectly also benefiting their businesses with positive word of mouth and good public relations.
“This is for any business in Maine,” Pomerleau said of the proposed law change, which faced no opposition at the public hearing. “This bill could help raise many millions of dollars, for schools, for people with medical bills, for community organizations. If Laura, one business, can do $635,000 in five years at a little chicken shack, what if we train 100 businesses to do this? That’s what we want to do. Getting this bill passed is an important first step.”
A work session on the bill is scheduled for March 11.
Benedict, owner of the Red Barn, was returning from vacation Thursday and unable to make it to the public hearing.
Fowle, whose district includes the part of Augusta where the Red Barn is located, said the bill would make life easier for businesses raising money for charity by overhauling the language of the Charitable Solicitations Act.
She said the act was intended to make sure professional fundraisers, some of whom conduct telephone fundraising from out of state, are actually giving the money they raise to charities.
“It was not intended to stymie local charitable fundraising efforts led by the small businesses in our communities,” Fowle said. “But that’s exactly what almost happened late last year.”
Fowle said the Red Barn, working with Mills, was able to resolve the issue, but she submitted a bill to help make sure other small, local businesses wouldn’t have to worry about getting into legal trouble while raising money for worthy causes.
“Maine’s small businesses should be allowed to raise money for a good cause without having to deal with red tape,” she said. “Local employers want to be good citizens of the communities they serve, and we ought to let them do so.”
Sen. John Patrick, D-Rumford, co-chairman of the committee, said he’s a customer of the Red Barn but esaid he’s concerned unscrupulous businesses, if fundraising is unregulated, could take advantage of people’s sympathies for those in need by only giving a small portion of money raised to charity, and pocketing the rest.
“I’m wondering if there are some very brilliant people that game everything there is to game, and have a business that is marginal and know of someone who has cancer, and see that as a way to build up their business” but only give part of the proceeds from fundraising sales to the person with cancer.
Mills said there are laws against such fraud and the state has prosecuted businesses in the past for such schemes. And, she said, professiona fundraisers will still be subject to the regulation and licensing requirements they must meet now.
“We’re still going after paid solicitors who ask you for money, and continue to require them to be regulated and bonded,” Mills said. “This bill gets to the point of not impeding the good faith efforts of local citizens, whether it is the Elks or Boy Scouts or a community bank or business, to do whatever they can for their communities. We want to encourage that, not discourage it. We propose to eliminate them from regulation.”
Keith Edwards – 621-5647 [email protected]