Fundraising Registration: Why, Who, Where and How to Comply with the Laws. Handout:

Transcription

1 Fundraising Registration: Why, Who, Where and How to Comply with the Laws February 23, 2017 Handout: Maia Lee Marketing & Sales Manager, Affinity Fundraising Registration Toll-free Presenter Maia Lee, Marketing & Sales Manager Affinity Fundraising Registration I am not an attorney. I do not practice law. Do not consider what you learn today to be legal advice. The sources of information shared today include personal experience registering hundreds of organizations, conversations and exchanges with state charity officials, conversations with attorneys, my own and others, extraordinarily careful readings of published instructions and state forms, state statutes, the Unified Registration Statement instructions, and the book, The Law of Fundraising by Bruce R. Hopkins. 2 1

2 A Family Business 3 Overview State Requirements IRS Requirements Registration Requirements Online Fundraising Exemptions Fees Registered Agents Registration Process Documents What to Expect Annual Reports/Renewals Fundraising Consultants Penalties, Fines KY & Border States Support Services KNN Member Discounts Q & A DOWNLOAD: Registration101-KY.pdf 4 2

3 Generalizations Fundraising Registration = Charitable Solicitation Registration It is the law of the state in which you are soliciting that applies. Every general statement you can make about registration requirements or the process has an exception 5 = REPUTATION Passion + Mission + Accountability / Outcomes + Transparency + Integrity = Reputation 6 3

4 Failure to Register It breaks the law. Easier to report unregistered charity AFC / CFRE compromised False Report on 990 puts 501c status at risk Puts Board members at personal risk Donor loss Bequests & planned gifts challenged Fines and penalties Banned from fundraising 7 Unless the above-described report(s) are filed with the Registry of Charitable Trusts within thirty (30) days of the date of this letter, the following will occur: 1. The California Franchise Tax Board will be notified to disallow the tax exemption of the above-named entity. In addition, the above-named entity will be billed $800 plus interest by the Franchise Tax Board, which represents the minimum tax penalty. 2. Late fees will be imposed by the Registry of Charitable Trusts for each month or partial month for which the report(s) are delinquent. Directors, trustees, officers and return preparers responsible for failure to timely file these reports are also personally liable for payment of all late fees. PLEASE NOTE: Charitable assets cannot be used to pay these avoidable costs. Accordingly, directors, trustees, officers and return preparers responsible for failure to timely file the above-described report(s) are personally liable for payment of all penalties, interest and other costs incurred to restore exempt status. 8 4

5 Identify the Good Groups It s the law as far back as 1955 The Legislature finds that there exists in the area of solicitations and sales solicitations for charitable purposes a condition which has worked fraud, deceit and imposition upon the people of the state which existing legal remedies are inadequate to correct. Many solicitations or sales solicitations for charitable purposes have involved situations where funds are solicited from the citizens of this state for charitable purposes, but an insignificant amount, if any, of the money solicited and collected actually is received by any charity. Prior to solicitation. 501c 9 IRS reporting on Form 990 List the states with which a copy of this Form 990 is required to be filed. (990 Part VI, Sec C, Q 17) (Hint: 31) List the states with which a copy of this return is filed. (990-EZ Part V, Q 41) List all states in which the organization is registered or licensed to solicit funds or has been notified it is exempt from registration or licensing. (Sch G, Part I, Q 3) Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing this form? All organizations must describe in Schedule O the process, if any, the organization uses to review the Form 990. (990 Part VI, Q 11) 10 5

6 IRS reporting on Form 990 cont d Form 1023 and 990 available for public inspection (990 Part VI, Sec C, Q 18) 990 Part IV Q-17 More than $15,000 aggregate expenses for fundraising services requires Schedule G Part I Since June s now searchable 11 States Requiring Registration Alabama Alaska Arkansas California Colorado Connecticut District of Columbia Florida Georgia Hawaii Illinois Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina Tennessee Texas* Utah Virginia Washington West Virginia Wisconsin 12 6

7 Income Thresholds $50,000 CT, WA $30,000 TN $25,000 AL, AR, CO, FL, GA, HI, MD, MI, MN, MS, NY, NC, OH, PA, RI, SC, WV $15,000 IL $10,000 KS, ME, NJ $5,000 AK, MA, VA, WI $1,500 DC $0 CA, KY, LA, MO, NV, NH, NM, ND, OK, OR, UT 13 Solicitation Requires Registration TV Radio Newspaper Newsletter Letter Acquisition mailings Telephone Face-to-face Foundation Corporation Cause-related Marketing Social Media 14 7

8 Online Fundraising Do you have to register out-of-state if you are receiving online donations from out-of-state? ME, MN, RI, NJ, NY, IL, and NC 15 Online Solicitations Do you accept donations on your website? Do you drive website visits and visitors encounter Donate button? Do you target residents of a state? Do you receive regular or substantial donations from a state? Do you send communications directing prospects to a page with a donate now button? Do you follow best fundraising practices? Fundraiser in a box Social media 16 8

9 The Internet Mixed blessing Online fundraising State tracking File Online CO, HI, NM, OH, MS required AK, FL, SC, TN, and MI optional 17 Exemptions Churches Religious Organizations 19 No if 990 Education 24 Education Foundations 16 Hospitals & Foundations 14 / 7 Membership (civic, service) 24 (limited) Appeals conducted by volunteers on behalf of a named individual Gross Income < $25,000 Political Organizations 18 9

10 Annual State Fees $3, $500,000 up to $1 million -- $3,825 $4, $5 million up to $10 million -- $4, Registered Agents & More Certificate of Authority CO, DC, IL, and ND Resident Registered Agents CO, DC, IL, MI, ND, NM, UT Optional HI, MS, SC, and VA Conducting Business All other states Employees Sale of goods or services Providing services or labor Owning or renting property 20 10

11 The Registration Compliance Process The Right Person (not fundraiser or junior staff) Time Gather Documents Complete Forms Signatures Checks Packets Track renewals 21 Initial Registration Documents URS State form Notarize signed Audit IRS Determination Letter Articles of Incorporation Bylaws Chapter List Board List felonies? States where registered? Date you first began soliciting, state by state Form signed Schedule B NY, CA Solicitation materials - MI Payment 22 11

12 Unified Registration Statement A.k.a. URS Minor update in 2014 Significant update 2010 Instructions out of date 23 Prioritize the States Home Major solicitation numbers Large states Penalty states Stop soliciting Expensive states Low ROI states pri or i tize /prīˈôrəˌtīz/ Verb 1. Designate or treat (something) as more important than other things: Prioritize your credit card debt. 2. Determine the order for dealing with (a series of items or tasks) according to their relative importance: People prioritize their goals. How many states 24 12

13 Anticipate Problems Inexperience shows Board push-back Rejections Fundraising consultants When did you begin fundraising Any prior filings 25 Difficult and/or Expensive States Pennsylvania North Carolina Illinois District of Columbia Hawaii California Massachusetts Tennessee Utah Florida 26 13

14 Staying Registered: Renewals & Annual Reports Renewal vs. Annual Report 17/8 use URS (initial/renew) 31/36 require state forms 32 require 990 (all want the data) 20 due dates 14 no extensions 18 late fees 27 Providers of Professional Services Solicitors: telephone, planned giving by non-staff. All but 7 states require professional solicitor registration. Professional Fundraiser Professional Fundraising Consultant/Counsel Any third party paid to help you raise money

15 Providers of Professional Services Schedule G: professional fundraising services = services performed for the organization requiring the exercise of professional judgment or discretion consisting of planning, management, preparation of materials (such as direct mail solicitation packages), provision of advice and consulting regarding solicitation of contributions, and direct solicitation of contributions. However, professional fundraising does not include purely ministerial tasks, such as printing, mailing services. direct mail consulting, data analysis for solicitation, consulting, feasibility study, plan/produce programming for any media campaign, side agreements with staff 32 require registration. 21 require copies of contracts. 29 Professional Fundraising Consultant means any person, other than a bona fide officer or regular employee of a charitable organization, who is retained by a charitable organization for a fixed fee or rate under a written agreement to plan, manage, advise, consult, or prepare material for or with respect to the solicitation in this state of contributions for a charitable organization but who does not solicit contributions or employ, procure, or engage any compensated person to solicit contributions. No lawyer, investment counselor, or banker who renders professional services to a charitable organization or advises a person to make a charitable contribution during the course of rendering professional services to the person shall be deemed, as a result of such professional services or advice, to be a "professional fundraising consultant"

16 Penalties Written Warning Usually civil penalties Fines Noncompliance criminal 3rd degree felony Potential jail time Reputation 31 Anticipate fines Back filings & Initial filing fines: CA, CO, DC, FL, IL, MA, MS, NM, OH, OR, PA, RI, and/or SC 32 16

17 Kentucky & Border States State Income Threshold Details KY $0 MO $0 IL $15,000 Registered Agent & Certificate of Authority OH $25,000 online only WV $25,00 VA $5,000 TN $30,000 $25/mo late fee Available exemptions to apply for: MO Educational Org/Foundation: IL (corporate filing still req d), KY, OH, TN, WV, &VA Religious: IL (corporate filing still req d), KY, OH, & TN 33 Kentucky Registration Requirements Initial Registration IRS Determination Letter Form 990 If brand new with no 990, file URS Bylaws Articles of Incorporation NO FEES! Renewal Registration Due FYEnd months Form 990 Include 8868(s) Submit via CD Cover sheet referencing name & EIN NO FEES! 34 17

18 Watch out for CPAs and Attorneys and Newbies 35 Do-it-Yourself Options Affinity Single Portal GoSinglePortal.com -- built in estimator Fishman & Barrett, Nonprofit Fundraising Registration, 2 nd Ed URS 36 18

19 Affinity is Awesome! Experienced Partners: Proven (affordable) process Affinity Single Portal Full Support Independent Plus Independent Registration 37 Affinity Single Portal Since began build-out Cloud-based Full Support option Fully populated forms Demo March 9, 2016 Full Support March 10, 2016 Independent Registration Independent users 1 40 states 38 19

20 Exclusive Discounts for KNN Members Independent Registration Usually $45/state $10 off initial, $5 off renewal Discount code: KNN2017 Full Support Usually $6,000 initial filing cycle $1,000 discount on initial cycle $100 discount on maximum renewal fee 39 Resources FREE ESTIMATE Full Support Demo: Thursday, 3/9 1:00 p.m. EDT. Independent Demo: Friday, 3/10 1:00 p.m. EDT. MAIA LEE Toll-free 40 20

21 Q&A 41 Keep in Touch! Resources, Webinars, FREE Estimates Follow on LinkedIn: Full Support Demo: Thursday, 3/9-1:00 p.m. EDT. Independent Demo: Friday, 3/10-1:00 p.m. EDT