State nonprofit registration and compliance requirements can be challenging and confusing. The complexity is compounded by a lack of uniformity among the states in how registration and compliance are achieved. Keeping abreast of these requirements, meeting state expectations, and ensuring that a nonprofit’s greatest assets, its reputation and integrity, are spared from embarrassing press in print or on the evening news are of paramount importance. Also, with state budgets in disarray, new governance requirements and increased scrutiny at the state and federal levels, the risks of noncompliance have never been higher. The costs associated with required registration and compliance in all states, both in terms of time and money, is likely far less than the expenditures required if administrative or enforcement proceedings are initiated in just one state. This program will give you a broad overview of state charitable and corporate compliance requirements for nonprofits and provide valuable reference information that will assist you in meeting these requirements.

1. State Charitable & Corporate
Compliance for Nonprofits
Ron Barrett
October 26, 2011
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4. Today’s Speaker
Ron Barrett
VP of Nonprofit Services
National Corporate Research
Assisting with chat questions: Hosting:
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6. Presenter’s Contact Information
Ron Barrett
VP of Nonprofit Services
National Corporate Research. Ltd.
1100 G Street, NW, Suite 420
Washington, DC 20005
rbarrett@nationalcorp.com
www.nationalcorp.com
linkedin.com/pub/ronald-barrett/a/680/b00
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7.  Charitable Solicitation Registration,
Renewal & Compliance
 Nonprofit Corporate Compliance
www.nationalcorp.com 7

8.  Nonprofit vs. Tax Exempt, 501c3, Charitable
Organization:
 Nonprofit status is a matter of state law, which governs the
organization and creation of the entity
 Tax exemption is mostly a matter of federal law
 All tax-exempt organizations are nonprofits
 Not all nonprofits are tax-exempt
 Not all nonprofits are charitable organizations
 Not all tax-exempt organizations are charitable organizations
www.nationalcorp.com 8

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10.  How is “charitable solicitation” defined?
 Why is registration required?
 When should registration occur?
 Who must register?
 Where is registration required?
 What are the consequences of not
registering?
www.nationalcorp.com 10

11.  Charitable Solicitation Statutes & Administrative Rules
 Model Charitable Solicitations Act, 1986
 Multi-State Filer Project: NAAG/NASCO’s URS
 Charleston Principles
 IRS (New Form 990)
 Protection of Charitable Assets Act
www.nationalcorp.com 11

12.  Who Must Register: Anyone “soliciting”
charitable donations
 When to Register: Before solicitation
 Where is Registration Required: 39 states & DC
Caution: Beware of Exemptions, Exceptions & Exclusions
www.nationalcorp.com 12

13. Charitable Solicitation Registration, Renewal & Compliance
Registration required; accepts URS Registration required; does not accept URS
Registration required by Texas LETSA, PSA & VSA Registration NOT required
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14.  Supporting Documents: Good Standing
Certificates, Articles & Bylaws,
Qualification, Financial Reports,
Fundraising Contracts, Determination
Letter and Other Documentation
 Prerequisites:
Formation/Qualification/Registered Agent
 Forms: State-Specific vs. Unified Registration
Statement
www.nationalcorp.com 14

15. Not so “Unified” after all…
 Initial Registration: Accepted in 34 states and
DC; Required in DC, KY, LA & MS
 State-by-State Guidelines: Registration &
Compliance
 State-Specific Addendums Required:
(17 states require supplements or
state-specific attachments)
www.nationalcorp.com 15

16.  AR: Irrevocable Consent for  NH: Conflict-of-Interest Policy
Service of Process  NC: Fundraising Disclosure
 CA: Annual Registration Renewal  ND: Registered Agent Consent
Fee Report (RRF-1) & Certificate of Authority
 DC: Basic Business License  TN: Summary of Financial
 GA: Supplement to URS Activities
 ME: Maine Application Cover  UT: Supplement to URS
 MI: Supplement to URS (if filing  WA: URS Addendum
990-EZ)  WV: URS Supplement
 MN: Supplement to URS  WI: Supplement to Financial
 MS: Form FS Annual Financial Report on Form Other than 308
 MO: Solicitation materials
www.nationalcorp.com 16

17. Exemptions: They exist (industry-based,
monetary threshold, named persons) but
there’s a catch.
www.nationalcorp.com 17

18. Charitable Solicitation Registration, Renewal & Compliance
Hospitals must register Hospitals exempt with application or review
Hospitals exempt with conditions Hospitals exempt from registration
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19. Charitable Solicitation Registration, Renewal & Compliance
Registration required for educational institutions Exempts educational institutions with application
or notice Exempts educational institutions with conditions Exempts educational institutions
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20.  All states and DC exempt religious
organizations (some states limit
to those that do not file IRS
Form 990).
 Many states require an
exemption filing or letter.
www.nationalcorp.com 20

21. Fees
 Free: AZ, AR, KY, MI & NM
 Low Cost: (mostly <$50 and up to $100)
AL, AK, CO, CT, GA, IL, KS, LA, ME,
MN, MS, MO, NH, NY, ND, OK, RI,
SC, UT, WA, WV & WI
 High Cost: (some vary based on
receipts/contributions, but often over $200): CA, DC,
FL, HI, MD, MA, NJ, NC, OH, OR, PA, TN & VA
 Potentially Expensive: ($750 to $2,000) HI, OR &
MA
www.nationalcorp.com 21

22.  Online Registration:
 Required in CO, HI, NM
 Available in CA, MI, OH,
OK, SC, TN, UT, WI
 Growing slowly
www.nationalcorp.com 22

23.  Charleston Principles
 “…receive contributions on a repeated, ongoing or substantial
basis”
 What constitutes online solicitation:
 Active vs. passive solicitation
 Interactive vs. non-interactive website
 Donate Now, Social Media, Email Marketing
www.nationalcorp.com 23

24.  Nevada (City of Las Vegas – Application for
Charitable Solicitations Permit)
 Florida (Pinellas County Opinion and Appeal)
 Texas (LETSA, PSSA & VSA)
 DC (BBL-EZ)
 Rhode Island (CD ROM)
 Missouri (501c3s Exempt from Compliance)
www.nationalcorp.com 24

25.  DC: “Anything but” Basic
 Basic Business License  Itemized Financial
Application Statement
 Certificate of Occupancy  Fundraiser Contracts
 DCRA Clean Hands  Purpose Statement
Certification
 Good Standing Certificate  Tennessee: Summary of
 OTR Registration Financial Activities
 Qualification in DC  Massachusetts: 14-page
 Certified resolution annual renewal (Form PC)
 IRS Determination Letter
 Charter and Bylaws
www.nationalcorp.com 25

26.  Renewal/Compliance:
 Annual Registration or Renewal
 Annual Report &/or Audit
 Use of URS more limited (25 states & DC)
 URS Required in DC, LA & MS for renewal
 Amendments: Updates and amendments are required (theory
vs. practice)
 Due Dates & Fees
 Extensions: Federal & State; Not available in all states
 Status: Charity and fundraiser status searches, certificates &
documents
www.nationalcorp.com 26

27.  Failure of fundraisers to register impacts charities
 Consequences of failing to register and
non-compliance
 Civil and criminal prosecution (Entity and/or
Officers & Directors)
 Late fees, civil fines, attorney’s fees
 Forced return of charitable donations
 Publicly announced cease & desist orders
 Loss of ability to raise funds in state
 Taxation of all charitable donations received
How do states become aware of noncompliance?
www.nationalcorp.com 27

28. www.nationalcorp.com 28

29.  How is “nonprofit corporate compliance”
defined?
 Why is compliance required?
 When should compliance occur?
 Who must comply?
 Where is compliance required?
 What are the consequences of
noncompliance?
www.nationalcorp.com 29

30.  Corporate vs. Charitable Compliance
 Annual Report Requirements
 Update address, names of
contact at company, officers
& directors
 Registered Agent
 Annual Report Filing Fee
www.nationalcorp.com 30

31.  Types of Reports and Where They are Filed
 Initial and/or Annual (most states)
 Biennial (AK, DC, IA, NE & VT)
 Periodic (NH, OH, PA & TX)
 Special (MD, MO, NV & TN)
 Voluntary (MS)
 Not Required (AL*, NY, NC, OK & SC*)
* Only required in AL and SC if IRS 990-T is filed
 Paper vs. Online Filings
www.nationalcorp.com 31

32.  Consequences of Non-Compliance
 Late fees, interest and penalties
 Loss of good standing and ability to
conduct business in a state
 Suspension, revocation, and administrative
dissolution
 Loss of right to use name
 Loss of access to courts
www.nationalcorp.com 32

33. Helpful Resources
 Multi-State Filer Project (URS and Filing Guidelines)
http://www.multistatefiling.org
 National Association of State Charity Officials
http://www.nasconet.org
 National Corporate Research
 Forms Library & Filing Guidelines
http://www.nationalcorp.com/ncr/service/show/43
 Corporate Transactions & Compliance Blog
http://nationalcorp.wordpress.com/
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34. Find listings for our current season
of webinars and register at:
NonprofitWebinars.com
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