We’re a 501(c)(3) tax exempt organization (Thanks for helping us with that!). In your letter to us you say that if we “solicit contributions” we may need to register in our state. We don’t ask for donations, but we do have several fundraisers each year. Are our fundraisers considered “solicited contributions”?
Jennifer in Georgia
Congratulations on your 501(c)(3) tax exempt status from the IRS. Now it’s time to determine what your state requires from your organization.
Charitable solicitation registration
My source for information on nonprofit fundraisers is Nolo’s Nonprofit Fundraising Registration: The 50 State Guide
The Guide explains that 39 states (and the District of Columbia) require registration from nonprofit organizations that solicit donations in their state. (This is all nonprofits, not just those with 501(c)(3) tax exempt status.)
Definition of charitable solicitation
“Solicit contributions is defined broadly…Charitable solicitations don’t always have to involve asking for a donation. Offering to sell a product or service that includes a representation that all or part of the money received will be devoted to a charitable organization or charitable purpose is considered a charitable solicitation and triggers the registration requirement.”
So, fundraisers are included in the definition of charitable solicitations. That means if your homeschool group holds a fundraiser, you probably need to register in your state. But keep reading…
The good news is that all states offer exemptions to their charitable registration for certain types of nonprofits. One common exemption is for small nonprofits:
“Most states exempt very small nonprofits from registering. In most states “small” is defined by a nonprofit’s gross revenues, not the number of members it has. In many states (about 16) a nonprofit qualifies for this exemption if it has annual gross revenues of less than $25,000.”
I researched the exemption rules in Georgia (it was included in the Form 1023-EZ Application for 501(c)(3) tax exempt status service that I provided to Jennifer’s organization ). I learned that Georgia offers an exemption from charitable registration for nonprofits whose total revenue from contributions has been less than $25,000.00 for both the immediately preceding and current calendar years. Jennifer’s organization is under that $25,000 threshold in contributions and fundraisers, so she was happy to hear that her homeschool group did not need to register in Georgia. 🙂
Help for your homeschool organization
Determining whether your nonprofit is exempt from charity registration can be difficult. Exemptions vary from state to state. To determine whether your nonprofit is exempt in your state, you could look up the charitable solicitation laws of that state. The law is usually found on the Attorney General or Secretary of State’s website.
Or contact me, Carol Topp. I can do the research for you since I know what I am looking for!. This service includes drafting a letter for your board and future boards explaining the all required forms in your state with due dates. Cost: $50.
Carol Topp, CPA