Demystifying Charity Registration
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Transcript of Demystifying Charity Registration
Demystifying CharityRegistration
Making Your Solicitations Legal
AFP Western Massachusetts
Delivered by
Tony Martignetti, Esq.
Martignetti Planned Giving Advisors, LLC
January 19, 2011
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 MA & CT• Plan to get you going• Continuing Ed.
3
What Is Charity Registration
Requirements throughout the states and D.C. that charities register with authorities—or be exempt—everywhere they solicit.
4
Why Comply With The Laws
• IRS Form 990 • Criminal & civil penalties, including- MA: Notice; then civil penalty $50/day to $10,000 against officers & board members --> individually liable; reimbursement not allowed (effective 1/1/11)- CT: criminal; 1 yr/$5000- NY: civil fraud- NJ: civil fine, $10,000- PA: misdemeanor; 5 yrs/$10,000- MD: civil fine, $5000- DC: civil fines, penalties, fees- FL: 3rd degree felony; 5 yrs/$5000
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
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 MA & CT• Plan to get you going• Continuing Ed.
7
Where Do You Register
Everywhere you solicit, except where you’re exempt
8
What Is A Solicitation
• Varies state to state
• A few neat categories
9
What Is A Solicitation
• Mere existence of website accepting donations
- “Donate Now” button
- Passive solicitation
- NY, NJ, FL, GA, IL, AZ, DC, VA, others
10
What Is A Solicitation
• Website accepting donations + induce donors to it
- email, US mail, phone, ads, meetings, events
- Active solicitation
- MA, CT, CA, MD, TX (not email), UT, WA
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
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)
13
Charleston Principles
• Uniform definition of solicitation• National Association of State Charities Officials
(NASCO)• Not adopted by all states• Uncertain where adopted
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 MA & CT• Plan to get you going• Continuing Ed.
15
How Do You Register-Forms
• Vary drastically across the states• Unified Registration Statement (URS)• A few neat categories
- URS only (+ state idiosyncrasies) - URS + state forms - Non URS
-- “corporation doing business”- State forms only
16
How Do You Register-Docs
• Typical documents- By laws & articles of incorporation
- Tax exempt letter- Board list- Financial report- IRS Form 990
17
How Do You Register-Fees
• A few neat categories- Flat (CT)
- Tiered by gross revenue (MA) or contributions
- Tiered by in-state revenue (kindest)
• HI most expensive: $750 for largest
• 32 $100
• 5 free: AZ, AR, KY, MI, NM
18
How Do You Register in MA
• Attorney General & Secretary of the Commonwealth Corporations Division
• Few exemptions
- AG: Red Cross or veterans
- Corp. Div.: religious or raise < $5000
19
How Do You Register in MA• Attorney General
- Form PC
20
How Do You Register in MA
• With Form PC
- Tax-exempt letter
- By laws
- Certificate or Articles of Incorporation
- Form 990
- Financial statement if gross revenue > $200,000
- Fee $35 (< $100,000) to $250 (> $500,000)
• Annual reporting on Form PC
21
How Do You Register in MA• Corporations Division: Annual Report + fee
22
How Do You Register in CT
• Attorney General• Main exemptions
- religious- education, with qualifications- hospital, ditto- < $50,000 in contributions, ditto
• Apply for exemption
23
How Do You Register in CT
• Register with state form or URS
• $50 fee• Annual filing of financial report and Form 990 + $50
24
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 MA & CT• Plan for how to get going• Resources
25
Plan For How To Get Going-1
• Charity starts at home- enforcement also starts at home
-- NJ, FL, GA, AZ, WA- register there
26
Plan For How To Get Going-2
• Very high fundraising revenue states, if any
- dollar amount
- percentage of fundraising revenue
27
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- register where passive solicitation
triggers registration- work down the list
28
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
29
Plan For How To Get Going-4
• Prioritize• Two to three per month• May be exempt in some
- need to apply for exemption?
30
Continuing Education
• My blog http://www.mpgadv.com or scan:
-all the forms will be on my blog
• Send me a LinkedIn message
• National Association of State
Charity Officials, www.nasconet.org
• URS, http://www.multistatefiling.org
• My book: Charity Registration: State-by-State Guidelines for Compliance, http://www.StateCharityRegistration.com