Demystifying State Charity Registration Laws
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Presentation delivered to The Foundation Center in NY on March 11, 2014
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Demystifying State Charity Registration Laws
- 1. Demystifying State Charity Registration Laws The Foundation Center Delivered by Tony Martignetti, Esq. Martignetti Planned Giving Advisors, LLC March11, 2014
- 2. 2 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 tonymartignetti.com
- 3. 3 What Is Charity Registration Requirements throughout the states and D.C. that charities register with authorities--or be exempt--everywhere they solicit. tonymartignetti.com
- 4. 4 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 tonymartignetti.com
- 5. 5 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 tonymartignetti.com
- 6. 6 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 tonymartignetti.com
- 7. 7 Where Do You Register Everywhere you solicit, except where you’re exempt tonymartignetti.com
- 8. 8 What Is A Solicitation • Varies state to state • A few neat categories tonymartignetti.com
- 9. 9 What Is A Solicitation • Mere existence of website accepting donations - “Donate Now” button - Passive solicitation - NY, NJ, FL, GA, IL, DC, VA, others tonymartignetti.com
- 10. 10 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 tonymartignetti.com
- 11. 11 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 tonymartignetti.com
- 12. 12 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) tonymartignetti.com
- 13. 13 Charleston Principles • Uniform definition of solicitation • National Association of State Charities Officials (NASCO) • Not adopted by all states • Uncertain where adopted tonymartignetti.com
- 14. 14 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 tonymartignetti.com
- 15. 15 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” tonymartignetti.com
- 16. 16 How Do You Register-Docs • Typical documents - By laws & articles of incorporation - IRS determination letter - Board list - Financial report - IRS Form 990 tonymartignetti.com
- 17. 17 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 tonymartignetti.com
- 18. 18 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 tonymartignetti.com
- 19. 19 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 tonymartignetti.com
- 20. 20 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 tonymartignetti.com
- 21. 21 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 tonymartignetti.com
- 22. 22 Plan For How To Get Going-1 • Charity starts at home -- enforcement also starts at home -- FL, GA, WA -- register there tonymartignetti.com
- 23. 23 Plan For How To Get Going-2 • Very high fundraising revenue states, if any - dollar amount - percentage of fundraising revenue tonymartignetti.com
- 24. 24 Plan For How To Get Going-3 Web 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 tonymartignetti.com
- 25. 25 Plan For How To Get Going-3 Non Web Based Fundraising • Where solicit most - query database for constituent frequency by state - descending order of frequency - work down the list tonymartignetti.com
- 26. 26 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 tonymartignetti.com
- 27. 27 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