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The Village of Schaumburg Illinois adopted an ordinance that prohibited charitable organizations from soliciting contributions in public areas without a permit. Permits were only granted to organizations that could demonstrate that 75 percent of their receipts were applied towards "charitable purposes." Citizens for Better Environment, a nonprofit tax-exempt organization, was denied a permit because it did not satisfy the 75-percent requirement. CBE sued in federal district court, which ruled in their favor. The United States Court of Appeals for the Seventh Circuit affirmed this ruling.

Was Schaumburg's ordinance "overbroad" and therefore in violation of the First and Fourteenth Amendments?

Yes. In an 8-1 opinion, the Court held that charitable solicitation is not purely commercial speech and is closely related to forms of protected speech such as advocacy. Justice Byron R. White, who authored the majority opinion, argued that "it is clear" that charitable solicitations are protected. While Schaumburg had an interest in preventing fraud, the ordinance did not fully serve that interest, which could be accomplished through alternate means. The ordinance in question also barred legitimate organizations from soliciting contributions. Schaumburg's interest did not justify the ordinance's "interference with protected speech,",which was therefore unconstitutional.