The Supreme Court yesterday sharply curtailed the power of governments to regulate fund-raising by charities, religious groups and public interest organizations.
The court struck down laws that permit solicitations only by groups that spend a specified percentage of their money for "charitable" purposes. Such laws have become a primary weapon against charity abuse and fraud.
But the court said that in banning street and door-to-door solicitations by some groups, the laws also ban free speech.
At least 20 states, including Maryland, and scores of cities and towns, have laws similar to one in the village of Schaumburg, Ill. That was invalidated yesterday by the court in an 8-to-1 decision.
Maryland's law, which requires many charities to spend at least 75 percent for charitable purposes, was enacted in 1976 after newspaper revelations about the Pallottine fathers religious order. The Pallottines raised tens of millions of dollars, purportedly for poor people overseas, but spent most of their money on questionable investments, including a loan to help then-Maryland, governor Marvin Mandel pay for his divorce.
Maryland officials said yesterday that they would have to study the court's opinion before assessing its impact on the state law.
The Schaumburg law also required proof that no more than 25 percent was spent on salaries and other administrative costs before a solicitation permit could be granted. A public interest group, Citizens for a Better Environment, challenged the law, and was joined by dozens of religious groups and charities in the battle before the Supreme Court.
Justice Byron White, writing for the majority, said it is well-established that solicitations by such groups "involve a variety of speech interests -- communication of information, the dissemination and propagation of views and ideas and the advocacy of causes -- that are within the protection of the First Amendment" free-speech guarantee.
Limitations can be placed on these activities, he said, only if they are narrowly drawn and reasonably related to the abuse that is supposed to be prevented.
The percentage requirements meet neither of these criteria, the court said. Lots of organizations that are not fraudulent may spent more than 25 percent on salaries and administrative costs, particularly if their purpose is not so much charity but public education or advocacy.
And there is no indication, the court said, that organizations that spend more than 25 percent on these costs are "any more likely to employ solicitors who would be a threat to public safety" or privacy.
In addition, there are numerous other weapons, such as fraud and trespass statutes and disclosure requirements, to combat the abuses.
The percentage requirement, the court said, "plainly is insufficiently related to the governmental interests asserted in its support to justify its interference with protected speech."
White was joined by Chief Justice Warren Burger and Justices William Brennan, Potter Stewart, Thurgood Marshall, Harry Blackman, Lewis Powell and John Paul Stevens.
Justice William Rehnquist dissented.