state charitable & corporate compliance for nonprofits
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Sponsored by:A Service
Of:
State Charitable & Corporate
Compliance for Nonprofits
Ron BarrettOctober 26, 2011
Sponsored by:A Service
Of:
Advising nonprofits in:
• Strategy
• Planning
• Organizational Development
www.synthesispartnership.com
(617) 969-1881
info@synthesispartnership.com
INTEGRATED PLANNING
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Affordable collaborative data
management in the cloud.
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Today’s Speaker
Ron BarrettVP of Nonprofit Services
National Corporate Research
Hosting:
Sam Frank, Synthesis PartnershipAssisting with chat questions:
April Hunt, Nonprofit Webinars
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Presenter’s Contact Information
Ron Barrett
VP of Nonprofit Services
National Corporate Research. Ltd.
1100 G Street, NW, Suite 420
Washington, DC 20005
rbarrett@nationalcorp.com
www.nationalcorp.com
linkedin.com/pub/ronald-barrett/a/680/b00
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Charitable Solicitation Registration,
Renewal & Compliance
Nonprofit Corporate Compliance
www.nationalcorp.com
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Nonprofit vs. Tax Exempt, 501c3, Charitable
Organization:
Nonprofit status is a matter of state law, which governs the
organization and creation of the entity
Tax exemption is mostly a matter of federal law
All tax-exempt organizations are nonprofits
Not all nonprofits are tax-exempt
Not all nonprofits are charitable organizations
Not all tax-exempt organizations are charitable organizations
www.nationalcorp.com
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How is “charitable solicitation” defined?
Why is registration required?
When should registration occur?
Who must register?
Where is registration required?
What are the consequences of not
registering?
www.nationalcorp.com
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Charitable Solicitation Statutes & Administrative Rules
Model Charitable Solicitations Act, 1986
Multi-State Filer Project: NAAG/NASCO’s URS
Charleston Principles
IRS (New Form 990)
Protection of Charitable Assets Act
www.nationalcorp.com
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Who Must Register: Anyone “soliciting” charitable donations
When to Register: Before solicitation
Where is Registration Required: 39 states & DC
Caution: Beware of Exemptions, Exceptions & Exclusions
www.nationalcorp.com
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Registration required; accepts URS Registration required; does not accept URS
Registration required by Texas LETSA, PSA & VSA Registration NOT required
Charitable Solicitation Registration, Renewal & Compliance
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Supporting Documents: Good Standing
Certificates, Articles & Bylaws,
Qualification, Financial Reports,
Fundraising Contracts, Determination
Letter and Other Documentation
Prerequisites:
Formation/Qualification/Registered Agent
Forms: State-Specific vs. Unified Registration
Statement
www.nationalcorp.com
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Initial Registration: Accepted in 34 states and DC; Required in DC, KY, LA & MS
State-by-State Guidelines: Registration & Compliance
State-Specific Addendums Required:(17 states require supplements or state-specific attachments)
Not so “Unified” after all…
www.nationalcorp.com
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AR: Irrevocable Consent for
Service of Process
CA: Annual Registration Renewal
Fee Report (RRF-1)
DC: Basic Business License
GA: Supplement to URS
ME: Maine Application Cover
MI: Supplement to URS (if filing
990-EZ)
MN: Supplement to URS
MS: Form FS Annual Financial
MO: Solicitation materials
NH: Conflict-of-Interest Policy
NC: Fundraising Disclosure
ND: Registered Agent Consent
& Certificate of Authority
TN: Summary of Financial
Activities
UT: Supplement to URS
WA: URS Addendum
WV: URS Supplement
WI: Supplement to Financial
Report on Form Other than 308
www.nationalcorp.com
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Exemptions: They exist (industry-based,
monetary threshold, named persons) but
there’s a catch.
www.nationalcorp.com
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Charitable Solicitation Registration, Renewal & Compliance
Hospitals must register
Hospitals exempt with conditions
Hospitals exempt with application or review
Hospitals exempt from registration
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Charitable Solicitation Registration, Renewal & Compliance
Registration required for educational institutions Exempts educational institutions with application
Exempts educational institutionsExempts educational institutions with conditionsor notice
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All states and DC exempt religious
organizations (some states limit
to those that do not file IRS
Form 990).
Many states require an
exemption filing or letter.
www.nationalcorp.com
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Fees
Free: AZ, AR, KY, MI & NM
Low Cost: (mostly <$50 and up to $100)
AL, AK, CO, CT, GA, IL, KS, LA, ME,
MN, MS, MO, NH, NY, ND, OK, RI,
SC, UT, WA, WV & WI
High Cost: (some vary based on
receipts/contributions, but often over $200): CA, DC,
FL, HI, MD, MA, NJ, NC, OH, OR, PA, TN & VA
Potentially Expensive: ($750 to $2,000) HI, OR &
MA
www.nationalcorp.com
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Online Registration:
Required in CO, HI, NM
Available in CA, MI, OH, OK, SC, TN, UT, WI
Growing slowly
www.nationalcorp.com
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Charleston Principles
“…receive contributions on a repeated, ongoing or substantial
basis”
What constitutes online solicitation:
Active vs. passive solicitation
Interactive vs. non-interactive website
Donate Now, Social Media, Email Marketing
www.nationalcorp.com
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Nevada (City of Las Vegas – Application for
Charitable Solicitations Permit)
Florida (Pinellas County Opinion and Appeal)
Texas (LETSA, PSSA & VSA)
DC (BBL-EZ)
Rhode Island (CD ROM)
Missouri (501c3s Exempt from Compliance)
www.nationalcorp.com
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DC: “Anything but” Basic
Basic Business License
Application
Certificate of Occupancy
DCRA Clean Hands
Certification
Good Standing Certificate
OTR Registration
Qualification in DC
Certified resolution
IRS Determination Letter
Charter and Bylaws
Itemized Financial
Statement
Fundraiser Contracts
Purpose Statement
Tennessee: Summary of
Financial Activities
Massachusetts: 14-page
annual renewal (Form PC)
www.nationalcorp.com
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Renewal/Compliance: Annual Registration or Renewal
Annual Report &/or Audit
Use of URS more limited (25 states & DC)
URS Required in DC, LA & MS for renewal
Amendments: Updates and amendments are required (theory vs. practice)
Due Dates & Fees
Extensions: Federal & State; Not available in all states
Status: Charity and fundraiser status searches, certificates & documents
www.nationalcorp.com
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Failure of fundraisers to register impacts charities
Consequences of failing to register and
non-compliance
Civil and criminal prosecution (Entity and/or
Officers & Directors)
Late fees, civil fines, attorney’s fees
Forced return of charitable donations
Publicly announced cease & desist orders
Loss of ability to raise funds in state
Taxation of all charitable donations received
How do states become aware of noncompliance?
www.nationalcorp.com
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How is “nonprofit corporate compliance”
defined?
Why is compliance required?
When should compliance occur?
Who must comply?
Where is compliance required?
What are the consequences of
noncompliance?
www.nationalcorp.com
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Corporate vs. Charitable Compliance
Annual Report Requirements
Update address, names of
contact at company, officers
& directors
Registered Agent
Annual Report Filing Fee
www.nationalcorp.com
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Types of Reports and Where They are Filed
Initial and/or Annual (most states)
Biennial (AK, DC, IA, NE & VT)
Periodic (NH, OH, PA & TX)
Special (MD, MO, NV & TN)
Voluntary (MS)
Not Required (AL*, NY, NC, OK & SC*)
* Only required in AL and SC if IRS 990-T is filed
Paper vs. Online Filings
www.nationalcorp.com
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Consequences of Non-Compliance
Late fees, interest and penalties
Loss of good standing and ability to
conduct business in a state
Suspension, revocation, and administrative
dissolution
Loss of right to use name
Loss of access to courts
www.nationalcorp.com
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Helpful Resources
Multi-State Filer Project (URS and Filing Guidelines)
http://www.multistatefiling.org
National Association of State Charity Officials
http://www.nasconet.org
National Corporate Research
Forms Library & Filing Guidelines
http://www.nationalcorp.com/ncr/service/show/43
Corporate Transactions & Compliance Blog
http://nationalcorp.wordpress.com/
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