What is charitable registration?
A majority of states plus the District of Columbia require charitable organizations to register with either the Attorney General and/or the Secretary of State.
Should my organization register?
Yes – it’s the law. States exercise regulatory authority over charities based on two premises: the charity is physically “present” in the state or the charity raises funds in the state. Whichever the case, a state requires the organization to register, that is, to provide information about the charity and its operations. No matter what the size or means of raising funds it will give rise to regulatory obligations. Most states regulate fundraising through “solicitation laws”.
What constitutes registration?
Compliance reporting under solicitation laws are divided into two pieces: (1) registration, which provides an initial base of data and information about an organization’s finances and (2) annual financial reporting, keeping the state apprised about the organization’s operations with an emphasis on fundraising results and practices. Most states require both registration and annual financial reporting. At this time there is no unified requirement among states.
Technical compliance with any state’s registration law requires initial registration before the first solicitation has been directed in the state. The fact remains that many charities have not done the necessary legal homework before launching fundraising. If your charity is one, you should be very concerned. Failure to register before soliciting is a violation of law and could subject the organization (and in some circumstances, its directors or officers) to whatever sanctions exist in each state’s law or federal law. The bottom line: registration is the law and you must comply.
We can help!
A charity should not operate out of compliance and risk penalties. Keep Me Tax Free provides solicitation, state, and federal registration services for every state that requires it. Contact us at: http://keepmetaxfree.com/contact-us/