Most newly-established charitable organizations are in a hurry to start fundraising. But, many states have charitable registration and solicitation requirements that must be followed before fundraising activities can take place. And, with states increasing the enforcement of such requirements, charitable organizations should ensure that they remain in compliance with the requirements in the states in which they conduct fundraising activities.
In Pennsylvania, for example, an organization must register with the Bureau of Charitable Organizations if it solicits charitable contributions in the Commonwealth and either (i) pays a third party to fundraise on behalf of the organization or (ii) receives more than $25,000 in gross national contributions.
If an organization meets these characteristics, it must file a Form BCO-10 registration statement with the Bureau. Once the organization is registered with the Bureau, it must then annually submit a registration statement, a copy of its Form 990 return (or a Form BCO-23 if the organization is not required to file a Form 990 return with the IRS) and a copy of the organization's financial statements for its most recent fiscal year.
In addition to annual registrations, charitable organizations should be aware of a state's solicitation rules. In Pennsylvania, for example, all printed solicitations must contain form language provided by the Commonwealth, stating that the organization is registered with the Bureau. Similar disclosure requirements apply for oral solicitations.
Other states have comparable requirements, meaning charitable organizations seeking to operate on a national scale must comply with the rules of each state in which the charitable organization solicits and/or receives funds. An organization should comply with state requirements even if the organization's only connection to the state exists by virtue of the organization's website being accessed by the state's residents. Similar to Pennsylvania, though, most states do not require an organization to register until it has over a certain amount of gross national contributions. Therefore, smaller organizations may be exempt from registration in certain states.
In sum, a charitable organization should be attentive to the charitable registration and solicitation requirements in each state in which it solicits.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
