FAQ
Does the IRS require us to register state-by-state for fundraising?
The IRS requires of all charitable organizations with income of $25,000 or more that they file a 990 or 990EZ tax return. As of tax year 2000 that form requires each charity report:
1 - A list those states with which a copy of the form 990 is required to be filed, and,
2 - A list of all those states in which the organization is registered.
In most states that require you to register you are also required to file an annual copy of your 990.
Why do states require the registration of charitable organizations?
Charitable registration laws exist to protect citizens from fraud and abuse, to ensure accountability, and to create a central information source where the authenticity of those organizations can be verified by the public.
What organizations have to register?
Any charitable organization that makes a charitable appeal in a state requiring registration must register in that state. The definition of a "charitable appeal" varies widely from state to state, some of which define it quite broadly.
Are there exceptions to which organizations must register?
Yes, on a state by state basis. Common exceptions (but not in all states) may include colleges and universities, hospitals, organizations with income of less than $25,000, churches.
When are organizations required to register?
All charities are expected to register in each appropriate state prior to soliciting for support from within that state.
Without registering, we have been soliciting outside of our home state for some time. Should we still register?
Yes. You are operating illegally in those states and are subject to a variety of fines and penalties. We will work with the state on your behalf to try to keep those costs at a minimum.
What are the penalties for failing to register?
Again this varies from state to state. Possible penalties include:
Both civil and criminal penalties
Fines up to $25,000
Loss of nonprofit status
Loss of ability to raise funds in the state
Officers and board members can be subject to conviction of a 3rd degree felony that carries the potential for jail time.
You may also be sued for the return of all funds raised in a state.
What does it take to register?
In most states it requires the completion of a general information form, together with your the last financial statement, a list of officers and directors, a copy of your originating document, and the organization's tax exempt determination letter from the Internal Revenue Service.
Is registration a one-time event?
No. Most states require, after the initial registration, an annual report and sometimes a renewal registration. Due dates vary from state to state. Annual renewals are as much work as and often more than the initial registration.
Do all states require registration?
No. Currently 41 states and the District of Columbia require registration. 6 more may require Certificates of Authority. 4 have no fundraising registration requirement whatsoever.
Is there one central, public location where we can register for all or most states?
No. Only third parties, such as ourselves, provide that option.
What is the Unified Registration Statement?
This is a cover form accepted by 37 entities for initial registration. Little differs from state to state on this form. However, for annual renewals and reports each state has its own form.
How much does registration cost?
Registration, renewal and annual report fees vary state by state but range from $0 to $425. Smaller nonprofits might pay as little as $1,700 to register in 42 entities. Larger nonprofits could pay as much as $5,000. Annual renewal and reporting fees are similar.
Does email fundraising trigger a registration requirement?
Yes.