Demystifying State Charity Registration Laws
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Transcript of Demystifying State Charity Registration Laws
Demystifying State CharityRegistration Laws
The Foundation Center
Delivered by
Tony Martignetti, Esq.
Martignetti Planned Giving Advisors, LLC
March11, 2014
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Where We’re Headed
• What is Charity Registration• Why comply with the laws• Where do you register• What is a solicitation• How do you register• Registration in NY• Plan for how to get going• Continuing Education
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What Is Charity Registration
Requirements throughout the states and D.C. that charities register with authorities--or be exempt--everywhere they solicit.
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Why Comply With The Laws
• IRS Form 990 • Criminal & civil penalties, including
- NY: civil fraud- NJ: civil fine, $10,000- CT: criminal; 1 yr/$5000- PA: misdemeanor; 5 yrs/$10,000- MD: civil fine, $5000- DC: civil fines, penalties, fees- FL: 3rd degree felony; 5 yrs/$5000- GA: civil fine; $25,000
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Why Comply With The Laws
• Board member liability; fiduciary duty
• Gift challenge from donor or heir
- Disgruntled donor hires enterprising attorney
• Right thing to do; operate within the laws
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Where We Are
√ What is Charity Registration√ Why comply with the laws• Where do you register• What is a solicitation• How do you register• Registration in NY• Plan for how to get going• Resources
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Where Do You Register
Everywhere you solicit, except where you’re exempt
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What Is A Solicitation
• Varies state to state
• A few neat categories
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What Is A Solicitation
• Mere existence of website accepting donations
- “Donate Now” button
- Passive solicitation
- NY, NJ, FL, GA, IL, DC, VA, others
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What Is A Solicitation
• Website accepting donations + induce donors to it
- email, US mail, phone, ads, meetings, events
- Active solicitation
- CT, CA, MD, TX (not email), UT, WA, WI
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What Is A Solicitation
• Ask for charitable support by- Email- US Mail- Phone- Meetings- Events- Advertisements
• Active solicitation• These are a solicitation in nearly every state
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Even If You Are Soliciting
• You might be exempt• Exemptions vary drastically across states
- Mission, with qualifications
- Gross revenue
- Gross fundraising revenue
- Revenue from within the state (kindest)
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Charleston Principles
• Uniform definition of solicitation• National Association of State Charities Officials
(NASCO)• Not adopted by all states• Uncertain where adopted
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Where We Are
√ What is Charity Registration√ Why comply with the laws√ Where do you register√ What is a solicitation• How do you register• Registration in NY• Plan for how to get going• Resources
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How Do You Register-Forms
• Vary drastically across the states• Unified Registration Statement (URS)• A few neat categories
- URS only (+ state idiosyncrasies) (NY)- URS + state forms - Non URS
--”foreign corporation doing business”
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How Do You Register-Docs
• Typical documents- By laws & articles of incorporation
- IRS determination letter- Board list- Financial report- IRS Form 990
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How Do You Register-Fees
• A few neat categories- Flat (NY)- Tiered by gross revenue or contributions- Tiered by in-state revenue (kindest)
• HI most expensive: $750 for largest• 32 $100• 3 free: KY, MI, NM
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How Do You Register in NY
• 2 governing laws- Executive, EPTL
• Exemptions- Religious- Education, with qualifications- Gross contributions under $25,000 & no
professional fundraisers (incl. employees)- All or most funding from 1 gov’t agency, with
qualifications- Veterans, law enforcement, PTA
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How Do You Register in NY• Apply for exemption
• Not exempt
- URS or state form (CHAR 410)
- IRS tax exempt letter, by-laws, articles of incorp., 990, financial stmnt.
- Indefinite registration for $25
- Annual financial reporting
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NY Annual Financial Reporting
• Gross revenue under $100,000- unaudited report + $10
• Gross revenue up to $250,000*- fin. stmnt w/CPA review + $10
• Gross revenue over $250,000* or paid fundraisers- audited fin. stmnt w/CPA opinion + $25*changes to $500,000 on 7/1/14
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Where We Are
√ What is Charity Registration√ Why comply with the laws√ Where do you register√ What is a solicitation√ How do you register√ Registration in NY• Plan for how to get going• Resources
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Plan For How To Get Going-1
• Charity starts at home-- enforcement also starts at home
-- FL, GA, WA-- register there
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Plan For How To Get Going-2
• Very high fundraising revenue states, if any
- dollar amount
- percentage of fundraising revenue
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Plan For How To Get Going-3Web Based Fundraising
• Do you need every state?- if not, take safe harbor & restrict giving
• Where solicit most- descending state populations
-- www.census.gov- work down the list
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Plan For How To Get Going-3Non Web Based Fundraising
• Where solicit most- query database for constituent frequency by state- descending order of frequency- work down the list
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Plan For How To Get Going-4
• Don’t be intimidated or overwhelmed
• Follow a plan
• One to three per month
• May be exempt in some
- need to apply for exemption?
• You can do this
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Continuing Education
• tonymartignetti.com• nasconet.org (state charity officials)• multistatefiling.org (URS & related• my book: Charity Registration: State-by-State
Guidelines for Compliance• site I’m building
-- give me your card for info
tonymartignetti.com