Many homeschool groups breath a sigh of relief when they get 501 tax exempt status from the IRS! But only a few realize that their government paperwork is not over!
41 states require nonprofits to register with their state when they solicit contributions.
What does “soliciting contributions” mean?
Well, that’s not always very clear and can vary by state.
The most obvious charitable solicitation activities are:
- Asking for a donation via mail or email
- Fundraising events (such as bake sales, silent auctions, charity dinners, etc.). Yes, hosting a fundraiser probably means your homeschool group needs to register as a charity in your state (frequently the Attorney General of the state) and give them annual reports.
A little less obvious, but could mean your homeschool group still needs to register in your state for conducting “charitable solicitation.”
- Revenue from the sale of products and/or services, such as “selling” classes to homeschool students.
- Tuition and registration fees
- Membership dues
- Field trip and activity fees (or what is called Program Revenue, the revenues from conducting your educational programs)
Yikes! Program revenue, membership dues, and tuition are the major sources of revenues for all homeschool groups! That means your homeschool group probably must register with your state for conducting charitable solicitation.
How to register in your state for Charitable Solicitation
Research your state laws to see how they define “charitable solicitation.” It is usually the state’s Attorney General website that you will be visiting. Your state may define “charitable solicitation” as just asking for donations or hosting a fundraiser. Or it could mean your program revenues too. I recommend these sites to do your research:
This webinar will help you understand the IRS and state required filings for homeschool nonprofit organizations. It will explain the various agencies you will deal with at the state level and guide you as you do your research.
If doing research is not how you want to spend your time, hire an experienced homeschool consultant willing to dig into the research for you. Be prepared to pay $100-$200+ for their time. This stuff is not easy to research. The consultants will look for any eligible exceptions to registering and the annual reporting for your organization. I recommend:
- HomeschoolCPA Recommended Consultants
- Harbor Compliance. Good information on their website, but they are expensive!
- A local CPA with experience in your state’s nonprofit filings.
I was greatly helped by reading States Increasingly Say That All Revenue Sources Constitute a Solicitation from the Foundation Group