Be Sure You’re Registered

Is your organization registered as a charity in all the states it should be? This may have been a low priority in the past, but the redesigned Form 990 brings the issue front and center by asking organizations to provide a list of the states in which they are registered and in which they are required to file Form 990.

Sign of the Times
Most states have laws to regulate fundraising solicitation within their borders. Unfortunately, the registration requirements vary considerably from state to state.  Generally speaking, if your not-for-profit has a physical presence in a state that requires registration or if you raise funds there, you must provide the state with basic information about your organization and programs. In many cases, annual financial reporting is also required.

 Not all states require charities to register, and some states offer certain exemptions. You generally must register and apply for the exemption to receive it. (Note: Being incorporated within a state is not the same as registering.)

                                                        Definition of Fundraising

Letters, phone calls, and advertisements that solicit funds from a state’s residents are clearly considered fundraising efforts. Even small organizations that conduct modest fundraising efforts may be required to register in multiple states. The question of how state requirements apply to Internet fundraising further complicates an already complex issue.

Take Action

The new 990 requirements make it imperative to address the state registration issue as soon as possible. Failure to comply with the applicable requirements could have serious legal consequences.