This document summarizes charitable solicitation registration requirements in the United States. It outlines which entities must register, including charities, fundraising consultants, professional solicitors, and commercial co-venturers. It also discusses registration and reporting procedures, contractual requirements, disclosure requirements, and exemptions. Religious organizations, educational institutions, hospitals, and small charities are often exempt from certain registration rules.

1. CHARITABLE
SOLICITATION
REGISTRATION
Chip Watkins, Esq.
Webster, Chamberlain & Bean, LLP
April 3, 2012
Thrive. Grow. Achieve.

2. WHO MUST REGISTER?
―CHARITIES‖
• Section 501(c)(3) – 39 states and DC
• Section 501(c)(4) – Many states (not DC or California)
• Anyone making a ―charitable appeal (Pennsylvania and some other states)
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3. WHO ELSE MUST REGISTER?
FUNDRAISING CONSULTANTS –25 STATES
(PA DEFINITION)
• Any person 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 Commonwealth of contributions for
a charitable organization, but who does not solicit contributions or
employ, procure or engage any compensated person to solicit contributions and
who does not have custody or control of contributions.
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4. WHO ELSE MUST REGISTER?
• Professional Solicitors (Paid Fundraisers)
• 40+ states
• Any person who is retained for financial or other consideration by a charitable
organization to solicit in this Commonwealth contributions for charitable
purposes directly or in the form of payment for goods, services or admission to
fundraising events, . . . or a person who plans, conducts, manages, carries
on, advises, consults, whether directly or indirectly, in connection with the
solicitation of contributions, sale of goods or services or the production of
fundraising events for or on behalf of any charitable organization, but does not
qualify as a professional fundraising counsel . . .
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5. WHO ELSE MUST REGISTER?
• Commercial Co-Venturers (7+ states)
• NJ definition: ―Commercial co-venturer‖ means any person who, for profit or
other consideration is regularly and primarily engaged in trade or commerce
other than in connection with the raising of funds or any other thing of value for
a charitable organization, and who advertises that the purchase or use of his
goods, services, entertainment or any other thing of value will benefit a
charitable organization
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6. SOLICITATION
• Request for contributions
• Offer to sell product or service
• Announcement of event to benefit charity.
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7. EXEMPTIONS
RELIGIOUS ORGANIZATIONS
• Sometimes from statute
• Sometimes from registration and reporting
• Churches are exempt in every state.
• Church-related organizations that are not required to file Form 990 are exempt in
every state except AZ and WV.
• Form 990 filers exempt in about 25 states.
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8. EXEMPTIONS
EDUCATIONAL INSTITUTIONS (SCHOOLS, COLLEGES, AND
UNIVERSITIES)
• May be exempt from registration in all but 8 states.
• Exemption may include affiliated foundations, alumni associations, and booster
clubs in 23 states.
• Usually requires accreditation
• Excludes ―think tanks,‖ etc.
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9. EXEMPTIONS
• Hospitals (and in some states, affilated organizations)
• Membership Organizations
• Small EOs whose fundraising is conducted exclusively by volunteers
• Gross receipts < $25,000
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10. CONTRACT REQUIREMENTS
• 20-25 states have verbatim required content for contracts between charities and
consultants, solicitors, or CCVs.
• 20 states require contracts to be filed with the state.
• All contracts related to fundraising should be reviewed for compliance by legal
counsel before signing by charity.
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11. CROSS-CHECKING
• A charity may not contract with an unregistered consultant, solicitor, or CCV.
• A vendor may not contract with an unregistered charity.
• State will require registration (or proof of exemption).
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12. CHARITIES—INITIAL REGISTRATION
• Unified Registration Statement accepted by 35 states. www.multistatefiling.org
• 10-12 states require supplements
• CO, HA, and NM—online only
• RI –Submit all document on CD-ROM
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13. CHARITIES—ANNUAL RENEWAL/REPORT
ABOUT ½ THE STATES ACCEPT THE URS
OTHERS REQUIRE THEIR OWN FORMS
USUALLY REQUIRES FORM 990 OR 990-EZ AND/OR AUDITED
FINANCIAL STATEMENTS.
RENEWALS/REPORTS DUE:
• Form 990 due date (w/ extensions, usually)
• Fixed date
• Anniversary of registration
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14. FORM 990/990-EZ
• Scrutinized by states
• Follow instructions
• Use only IRS forms/schedules
• No non-standard attachments
• Functional expense reporting
• Schedule G (Fundraising)
• Review by legal counsel before filing
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15. DISCLOSURES TO DONORS
• 12 require verbatim disclosures in written solicitations.
• Many states require disclosure that caller is a paid (or ―professional) solicitor.
• Disclosure of FR percentage is not required except in response to a question; must
answer truthfully.
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16. IRS RECEIPT REQUIREMENTS
GIFT OF AT LEAST $250, OR
PAYMENT OF AT LEAST $75 IN EXCHANGE FOR A BENEFIT:
• Date of gift
• Amount of gift
• Whether any benefit was received in exchange for the gift
• Estimated FMV of any benefit
• Statement that deduction is limited to excess of gift over FMV of benefit
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17. ―INSUBSTANTIAL‖ BENEFITS
• FMV is lesser of $99 or 2% of the amount of the payment
• Payment is at least $49.50 and cost of ―token item‖, e.g., calendar, mug, t-
shirt, umbrella, key chain, is not more than $9.90
• Charity sends free, unordered items whose aggregate annual cost is not more than
$9.90 and tells donor she can keep the items without making a contribution.
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18. ―INSUBSTANTIAL‖ BENEFITS
• Rev. Proc. 90-12
• Modified by Rev. Proc. 92-49
• Inflation-adjusted annually
• See Rev. Proc. 2011-52, Sec. 3.25(2)
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19. QUESTIONS?
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20. THANK YOU!!
CHIP WATKINS, ESQ.
WEBSTER, CHAMBERLAIN & BEAN, LLP
(202) 688-3548
CWATKINS@WC-B.COM
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