Riley v. National Federation of Blind of North Carolina, Inc.

487 U.S. 781, 108 S. Ct. 2667, 101 L. Ed. 2d 669, 1988 U.S. LEXIS 3031, 56 U.S.L.W. 4869

• Court: Supreme Court of the United States
• Decided: June 29, 1988
• Docket: 87-328
• Status: Published

Opinions

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,¹ a term defined by a three-tiered schedule.² A fee up to 20% of the gross 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 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.³ Only the third disclosure requirement is challenged here:

Finally, professional fundraisers may not solicit without an approved license.⁴ In contrast, volunteer fundraisers 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 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 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 259c of the funds collected on administration or fundraising expenses. Id., at 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 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 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 259 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 money a charity can spend on fundraising activity,” and therefore “a direct restriction on protected First Amendment activity.” 467 U. S., at 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 966-967.

As in Schaumburg and Mini non, 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.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.” 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 talis-manic reliance on the mere assertion of it, amounts to little more than a variation of the argument rejected in Schaum-burg 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.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 mínimums, not máximums.

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 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, 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, 124 (1981)); cf. First National Bank of Boston v. Bellotti, 435 U. S. 765, 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, 97 (1977) (criticizing, in the commercial speech context, the State’s paternalistic interest in maintaining the quality of neighborhoods by restricting speech to l'esidents). “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, 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 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 naiveté 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 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.

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 950, n. 2. Permitting rebuttal cannot supply the missing nexus between the percentages and the State’s interest.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 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 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 969; Near York Times Co. v. Sullivan, 376 U. S. 254, 279 (1964).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 “re-duele] the quantity of expression.” Buckley v. Valeo, 424 U. S. 1, 19, 39 (1976). Whether one views this as a restriction of the charities’ ability to speak, Munson, supra, at 967, and n. 16, or a restriction of the professional fundraisers’ ability to speak, Munson, supra, at 955, n. 6, the restriction is undoubtedly one on speech, and cannot be countenanced here.

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 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 639; Schneider v. State, 308 U. S. 147, 164 (1939).

Ill

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, 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. Bigelow v. Virginia, 421 U. S. (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 mérely “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 632, quoted in Munson, 467 U. S., at 959-960. See also Meyer v. Grant, 486 U. S. 414, 422, n. 5 (1988); Thomas v. Collins, 323 U. S., at 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.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 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 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, 714 (1977), we held that a person could not be compelled to display the slogan “Live Free or Di.e.” 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 714 (quoting West Virginia Board of Education v. Barnette, 319 U. S. 624, 637 (1943)). See also Pacific Gas & Electric Co. v. Public Utilities Comm’n of California, 475 U. S. 1, 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, 559 (1985); Abood v. Detroit Board of Education, 431 U. S. 209, 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 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, supra, at 963; Schaumburg, 444 U. S., at 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 charity in cash.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.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 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.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. E. g., Consolidated Edison Co. v. Public Service Comm'n of New York, 447 U. S. 530, 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, 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 candes 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, 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).¹³

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, 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.¹⁴

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.

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 (209f) 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. ...”

3 North Carolina Gen. Stat. S 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 charitahle purpose by the professional fund-raising 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 fund-raising counsel or professional solicitor has been soliciting funds for less than 12 months.”

4 North Carolina Gen. Stat. S 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 aet as a professional fund-raising counsel or professional solicitor until after obtaining such license.”

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, 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.

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 ap-pellees) supports the judgment below.

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 Muimon demonstrate.

8 The dissent is correct Dial the statute requires that expenses incurred in the dissemination of information be considered legitimate by the fact-finder. 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 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 265-266.

9 Of omrse. 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).

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 thi’ough the charity’s hands is of small import.

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.

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. <?., 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 O', e., the gross funds collected less costs), making .this more relevant figure far .easier to come by. Brief for Appellants 15.

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, 544-545 (1945) (Jackson, J.. concurring).

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.