Charity RegistrationDemystified

Nonprofit Technology News

Tony Martignetti, Esq.

Martignetti Planned Giving Advisors, LLC

April 17, 2013

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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• Plan for how to get going• Continuing Ed.

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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, e.g.:

-- FL: 3rd degree felony; 5 yrs/$5000 & narrow exemptions

-- AZ: Class 1 misdemeanor & scant exemptions-- IL: civil fine; $500 to $1,000-- PA: 1st degree misdemeanor; $10,000; 5 years-- GA: civil fine; $25,000 -- NJ: civil penalty up to $10,000-- DC: civil fines, penalties, fees-- VA: misdemeanor; 1 yr/$1000 fine

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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• Plan for how to get going• Continuing Ed.

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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

- DC, VA, FL, AZ, NY, IL, PA, GA, others

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What Is A Solicitation

• Website accepting donations + induce donors to it

- email, US mail, phone, ads, meetings, etc.

- Active solicitation

- CA, TX, MD, UT, WA, WI, others

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What Is A Solicitation

• Ask for charitable support by- Email- US Mail- Meetings- Events- Advertisements

• 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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Where We Are

What is Charity Registration Why comply with the laws Where do you register What is a solicitation• How do you register-Forms, Docs, Fees• Plan for how to get going• Continuing Ed.

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How Do You Register-Forms

• Vary drastically across the states• Unified Registration Statement (URS)• A few neat categories

- URS- URS + state forms - Non URS: state forms only

--”foreign corp doing business”

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How Do You Register-Docs

Typical documents- By laws & articles of incorporation

- Tax exempt letter- Board list- Financial report- IRS Form 990

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How Do You Register-Fees• A few neat categories

- Flat

- Tiered by gross revenue or contributions

- Tiered by in-state revenue (kindest)

• HI most expensive: $750 for largest

• 5 free: AZ, AR, KY, MI, NM

• 32 $100

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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• Plan for how to get going• Continuing Ed

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Plan For How To Get Going-1

• Charity starts at home-- so does enforcement

--- examples in FL, GA, AZ, 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

--- 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

• http://www.nasconet.org• URS, http://www.multistatefiling.org

• My blog, http://www.tonymartignetti.com

--Tony Martignetti Nonprofit Radio

-- LinkedIn, Twitter, YouTube, Facebook

-- Email sign-up for weekly radio alerts

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Continuing Education

My book: Charity Registration: State-by-State Guidelines for Compliance--http://tonymartignetti.com/charity-registration