Tag Archives: Charity Registration

Charity Registration Roundup

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Image by jiiji, Flickr Creative Commons license
Image by jiiji, Flickr Creative Commons license

Charity Registration—the requirements that charities register with state authorities in each state where they conduct solicitations for donations—doesn’t change much, so I’ve been holding a bunch of news for a roundup. Each state has its own fee structure, timing, definition of “solicitation,” exemptions and sheath of forms (there’s some uniformity here, but also lots of variation).

These laws are a morass. Good thing they don’t change often.

Here’s what I’ve got:

Delaware will tighten registration. I always advise clients to register as a foreign corporation doing business in Delaware. Other states, too. I am quick to add that other consultants disagree with me, saying those states without charitable solicitation acts don’t require registration. The answer hinges on what is “doing business” in a state, and I believe soliciting donations is doing business (unless a state like Nebraska says otherwise).

The question will soon be moot in Delaware because a bill that has the support of the state’s nonprofit association, Delaware Alliance for Nonprofit Advancement, seems likely to become law, enacting the Delaware Charitable Solicitation Act of 2013.

Really want to read it? OK.

Beyond the “foreign corporation” registration, which is not devoted to charitable work, since 1996 the state has had a statute mostly limited to fraud prevention in solicitations. That law will be replaced by the new act.

Arizona repealed registration. Last summer, Arizona eliminated registration. The secretary of state says any filing after 9/13/13 will be returned.

Unless you’re a vets organization. Then you must register with this form. That’s part of my adoration for Charity Registration: the string of laws, exemptions, exceptions, and exceptions to the exemptions. In each state.

Another person has a sense of humor with all this. I laugh at it often. I’m not alone. From @salmanj10, this 2010 tweet: “London hostage/death threat. Look for charities with long standing charity registration.”

It’s just as bad in the U.S.

New York made a small change. The Nonprofit Revitalization Act passed in December with a positive change in registration for all charities soliciting here, regardless of where you’re incorporated. The threshold for submitting an audited financial statement is $500,000 in annual gross revenue, up from $250,000.

That’s good news! I’m all for making it easier and less expensive for small- and mid-size charities.

The new law makes sweeping changes for nonprofits formed in New York around governance, conflicts of interest, financial oversight and whistleblowers. (NY attorney general’s press release)

Most of the provisions take effect this July 1. You really don’t want to read this beast. Trust me. OK, it’s your life.

United Way ED resigned. The executive director at United Way of the Virginias resigned after it came to light late last year that the organization lost its charity solicitation authority back in 2008, for failure to keep up with registration.

As much of a morass as it is, you have to keep up with Charity Registration.

 

 

Create the Impossible

Charity Registration,
image courtesy of iandesign, creative commons license
Image courtesy of iandesign, Creative Commons License

Last week I read this NPR science blog by Robert Krulwich about your mind’s capacity to imagine the impossible. It’s based on triangles that can be drawn easily enough, but cannot exist in physical space. Yet we see them as plausible.

Quoting Krulwich:
“Our brains, it turns out, are not prisoners of the world we live in; we can fly free! We can, any time we like, create the impossible.”

Create the impossible. I love that!

You can imagine what doesn’t exist. So do it! It’s the first step to fulfillment.

A nation without hunger? A world without hunger? Thank goodness for those who have beaten the rest of us there.

A corruption-free New York capital? A harmonious U.S. Congress? I’m getting carried away.

I’m creating an impossibility. A cheap, easy, fully-automated site for Charity Registration.  It’ll blow the lid off this regulatory morass and it’s under development. I’ll have lots to share as we progress.

What’s the impossible you want to create?

Promo shot for the Nonprofit Boot Camp with host Jamie Bristow-Lavoie

Nonprofit Boot Camp Interview

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Promo shot for the Nonprofit Boot Camp with host Jamie Bristow-LavoieIn May I was a guest on Nonprofit Boot Camp with host Jamie Bristow-Lavoie.

She and her team at NonprofitMatch1.com put together a collection of interviews as the Boot Camp and I’m included. There’s also Bob Penna who’s been a guest on Nonprofit Radio.

Jamie and I talked about the importance and timeliness of Planned Giving and Charity Registration. Here’s the audio interview:

That was back in May. Do you feel like I do, that summer is flying by?

I am enjoying it–and that’s reassuring–but it feels like the days have had only 14 hours. I feel like I’m owed time that passed without me in it.

Jamie Bristow-Lavoie, thank you very much for inviting me to Boot Camp! You’re a fun drill sergeant.

IRS Continues Inquiry On Charity Registration Compliance

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IRS building courtesy of Foist on Flickr
IRS building courtesy of Foist on Flickr
The IRS form 990 for 2012 has been released, and it continues to inquire about your office’s compliance with Charity Registration laws in the states where you solicit donations.

There have been significant changes to the form and its shorter sibling the 990-EZ.

But the Charity Registration inquiries remain.

Part VI, question 17 asks you to list the states in which you are required to file form 990. That is a basic part of registration in nearly every state. If you’re required to register before you solicit in a state, odds are you’ll be required to include the 990 with your application.

This is the federal agency’s oblique way of gaining jurisdiction–or legitimacy–to inquire about your compliance with state laws. It’s interesting.

Schedule G, part I, question 3 has you explicitly list the states in which you’re registered to solicit, or have been notified you’re exempt.

I hate to nitpick, but you won’t necessarily be notified by a state if you’re exempt there. In a good number of states, you determine exemption on your own and make no filing. In others you must file for exemption and be approved.

Every charity doesn’t submit this schedule with its 990. You file schedule G if, among other things, you spent more than $15,000 for professional fundraising services or reported more than that in fundraising event gross income. (See form 990, part IV, questions 17-19.)

Form 990 is signed by an officer under penalty of perjury. (See part II.)

There are precious few places where our IRS inquires about your compliance with state laws where you solicit donations.

But they’re alive and thriving.

If you want a fuller explanation of Charity Registration, take a look at the article I published in the journal “Taxation of Exempts.”

CMA Section: I am not your attorney or your accountant. Seek the advice of your professional advisors in all matters of IRS compliance.

Charity Registration Matters

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please comply
Complying with state laws that mandate registration before your charity solicits in a state is good business for a number of reasons.

First, failure to comply can embarrass you. New Jersey governor Chris Christie’s “Hurricane Sandy New Jersey Relief Fund” is a generous, well-intentioned endeavor. The website says it’s a “charitable non-profit organization” but the fund is not registered with the New Jersey Division of Consumer Affairs, Charity Registration Section.

I have neither the time nor inclination to check registration status for specific charities, unless they’re my registration clients.

In this case, blogger Blue Jersey had the time and was so inclined. I think that’s embarrassing for the fund. Performer Mary J. Blige was embarrassed earlier this year when her charity was investigated by the New York attorney general.

Do you think only high profile charities are at risk? There was a small Connecticut police charity exposed by a freedom of information act complaint. The head of the organization was fined $22,500.

Second, your board members are at risk because they’re fiduciaries to your nonprofit. I explain the risk and share an example in this video from the Direct Marketing Association Nonprofit Federation.

Finally, the IRS wants to know if you’re complying. Form 990 (here), part VI, question 17 asks for the states in which you’re required to file the 990. That’s a part of registration in every state.

To help you get into compliance I wrote “Charity Registration: State-by-State Guidelines for Compliance.”

Come into the flock of compliant charities and register in each state where you solicit. It matters.