Category Archives: Nonprofit registration

Starting a NonProfit and Soliciting Donations in Washington D.C.

The District of Columbia does not require charitable registrations, but to solicit contributions in DC, you will need to obtain a Basic Business License.  With our help, the steps below will be as easy as 1-2-3!

Qualify to do business in the District of Columbia

  1. Designate a Registered Agent
  2. Obtain a Certificate of Occupancy number (only if you are located in DC)
  3. Make sure that your IRS Determination Letter is current
  4. Register with the DC Office of Tax and Revenue
  5. Apply for Exemption from Income and Franchise tax
  6. Obtain a Certified Resolution
  7. Make sure you don’t owe the DC Government money
  8. Apply online for your Basic Business License (BBL)

Qualify to do Business in the District of Columbia

If your organization is a corporation created outside the District of Columbia, you will have to register as a foreign nonprofit corporation with the DC Department of Consumer and Regulatory Affairs.  As part of this process, you will report the names of your corporate officers and designate a Registered Agent, either an organization or an individual located in DC who can accept legal documents for your organization.

Designate a Registered Agent

If you do not have someone who can represent you in DC, we can help with that too!  Our Registered Agent service can accept delivery of legal documents for your organization and make sure that they reach you.

Obtain a Certificate of Occupancy number

This is required if you have an office or other facility located in DC.  Most commercial office buildings already have a Certificate of Occupancy allowing use of their space by tenants.  You will need to obtain the number for your building and enter it as part of the application process for the BBL.

Make Sure that your IRS Determination Letter is current

If you applied for tax exemption from the IRS, you received a determination letter spelling out your organization’s status under the IRS code.  You will need that letter to apply for tax exemption in DC.  If the letter is more than four years old, you will need an updated letter, known as an Affirmation Letter.  A representative of your organization must request the Affirmation Letter from the IRS; more information is available at https://www.irs.gov/charities-non-profits/exempt-organizations-affirmation-letters.

Register with the DC Office of Tax and Revenue

This registration is done online and requires your organization’s tax ID number, identification of your organization’s structure, and the names, titles, home addresses, and Social Security numbers of the organization’s principal officers.

Apply for Exemption from Income and Franchise Tax

This isn’t a required step for the BBL, but now that your tax-exempt organization has registered with the DC Office of Tax and Revenue, you will want to make sure that you do not have to pay DC Income and Franchise Tax.  This application is done online at MyTax.DC.gov.  You will have to upload your IRS Determination Letter or Affirmation Letter as part of the process.

Obtain a Certified Resolution

A corporate officer must sign a form to certify that you are authorized to apply for the Basic Business License.  This form will be uploaded as part of the BBL application process.

Make Sure you don’t owe DC money

As part of the online application process for the BBL, you will be asked to file a Clean Hands Certificate, certifying that your organization does not owe the District of Columbia more than $100.  As with any other form, you must be able to answer this question truthfully, so make sure all accounts are up to date!

Apply online for your Basic Business License

The hard parts are done.  (Well, except for the payment.)  This application is done online, but if you have followed the steps above, you will have all the documents you need.  DC charges a fee of $412.50 for the BBL, but it does not have to be renewed for 2 years.

Starting Your Nonprofit

You’ve decided to start a nonprofit!  You see a need in your community, and you plan to do something about it.  So, where do you start?

  • First, do some brainstorming:
  • What do you hope to achieve, and how do you plan to go about it?
  • What will your organization do that existing organizations aren’t doing?
  • Where will the money come from?
  • What other resources will you need?
  • Will you be able to recruit volunteers?
  • Will you have paid employees?
  • Are there existing groups that you can partner with?

Write out a plan and a budget.   Identify your goals, your own skills and resources, and potential sources of assistance.

Next, decide on a legal structure.  Many nonprofits exist as unincorporated associations, but there may be advantages to creating a nonprofit corporation.  You might want to consult an attorney to discuss the pros and cons.  If you decide to incorporate, you will need to recruit a Board of Directors to manage the organization, register your Articles of Incorporation with your state government (in most states, this registration is done through the Secretary of State’s office), and meet any other state requirements.   Whether or not you incorporate the organization, you will need written documents to outline how your organization will operate.

The next step is to obtain a Federal Tax Identification Number, also known as an Employer ID number (EIN), from the IRS.  Even if the organization will have no paid employees, this will be needed to establish a bank account and to file reports with the IRS.   The IRS has streamlined this procedure, and it can be completed on their website at https://www.irs.gov/businesses/small-businesses-self-employed/how-to-apply-for-an-ein.

Once your organization has obtained an EIN, it needs to apply to the IRS to recognize its tax-exempt status.  Nonprofits are exempt from income tax because they have no owners or shareholders; the money they receive is used to carry out the organization’s purposes, and any money left over is kept for future use or donated to other nonprofits.  However, most nonprofits are still required to file annual reports with the IRS.  If your organization wants to be recognized as a charity (its purpose must be charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, or preventing cruelty to children or animals), you should apply to the IRS using Form 1023, Application for Recognition of Exemption from Income Tax Under Section 501(c)(3) of the Internal Revenue Code.  If your nonprofit falls into a different category (for example, a social club or a political organization), you would use IRS Form 1024.  More information is available on the IRS website and in IRS Publication 557.

Once the IRS has approved your application, they will issue a Letter of Determination that specifies your Federal tax-exempt status and whether contributions to your organization are tax-deductible.  But depending on the state where you are located, you may have to apply for exemption from state taxes too.  For example, California and Texas are two of the states that require a separate application to be exempt from state franchise tax.  State laws also vary as to whether a nonprofit organization is exempt from other state taxes such as sales tax.

Your Letter of Determination will also specify whether you must file an IRS Form 990, Return of Organization Exempt from Income Tax, each year.  That form is generally due four months and 15 days after the close of your organization’s fiscal year.

Nonprofit organizations are required to disclose information on their finances to the public.  Your Form 990 is considered public information and you must provide copies upon request.  You may also be required to include information telling how to request those copies on your website and in any solicitation literature.

And will your organization be soliciting donations from the public?  If so, most states will require you to register to solicit donations in their state.  We won’t go into the details here, because registration requirements and fees are different for each state.  If you hire a professional fundraiser or fundraising consultant, they may also be required to register.   Then most charitable solicitation registrations must be renewed each year, and you may be required to obtain an independent audit of the organization’s financial statements.  It can get complicated, but that’s why we’re here–to make the process easier.

Starting a Nonprofit and Soliciting Donations in Connecticut

In Connecticut, charities are regulated by the Department of Consumer Protection (DCP).  Any charity that solicits donations in Connecticut must register or file a claim for exemption from registration with the DCP.

Your organization may also need to apply for tax exempt status from the IRS and/or register with the Connecticut Secretary of State to do business in the state.  However, you do not have to file with the IRS or the Secretary of State in order to apply to register with DCP for charitable solicitation.  You may wish to consult an attorney or an accountant to determine what is best for your organization.

Before beginning to solicit donations in Connecticut, an organization must apply for registration, unless they meet the requirements for exemption.  They can file a claim for exemption if they meet any of the categories below:

  • Organized religious corporations, religious institutions, or religious societies;
  • Parent-teacher associations or educational institutions accredited and recognized by a government body;
  • Non-profit hospitals licensed under the laws of Connecticut or another state;
  • Governmental units in the United States; or
  • An organization that receives less than $50,000 in contributions annually, as long as the organization does not pay anyone to conduct solicitations.

If the claim for exemption is approved, the organization does not have to file again unless their status changes and they no longer qualify for exemption.  Exempt organizations are listed along with registered organizations on the DCP’s website at www.elicense.ct.gov, as organizations legally able to solicit contributions.

If your organization cannot claim an exemption, you must:

  1. Complete the initial registration form;
  2. Provide a copy of your most recent IRS Form 990;
  3. Provide audited financial statements if your revenue on the Form 990 exceeds $500,000; and
  4. Pay a $50 registration fee.

However, you do not have to furnish financial documents if you have not completed your first fiscal year or filed your first IRS form 990.

Any changes to the organization’s name, address, officers, tax exempt status, legal form, or fiscal year end must be reported to DCP within 30 days.

Registered organizations that wish to continue soliciting donations must renew their registration each year.  Renewal notices are send by email about 60 days before registration expires.  One email message will contain the user ID and a second message will contain the password.  Blank renewal forms are also available on the DCP website.

An organization should cross out any incorrect information on their renewal notice and write in the corrected information.  To renew online, they must upload the corrected and signed renewal notice, the IRS Form 990, and their audit report, if an audit is required.  They can pay the $50 registration fee with a credit or debit card.

If the organization’s registration is still due more than 65 days past the expiration date, they must apply for reinstatement by mail.  They will have to mail in a reinstatement form, the required attachments, any required audit report, and the $50 registration fee, plus a late fee of $25 per month.

If the organization will no longer solicit donations in Connecticut, they may withdraw by sending in the Form 990 for the last year in which they solicited donations, their registration number, and either a letter stating the date of withdrawal or a copy of a dissolution document.

Paid solicitors and professional fundraisers must also register in Connecticut.  These rules do not apply to any fundraiser who is either a permanent employee of the charity or a volunteer.

If a person or company plans, manages, or otherwise advises a charity regarding fundraising but does not solicit donations themselves or hire anyone to solicit donations, they must register as a fundraising counsel.  A fundraising counsel must have a contract with the charity and must submit a copy of the contract to the DCP.

If the person or company is hired to directly solicit contributions, they must pay an annual fee of $500 and post a $20,000 surety bond with DCP.  They must also file a notice-to-solicit at the start of each fundraising campaign and a financial report at its conclusion.  These reports are filed jointly with the charitable organization.

Volunteer fundraisers must have an organization’s written permission to use their name and should verify that the organization is registered to solicit donations.  If you wish to hold an auction or raffle to benefit a charity, you should check for local requirements or restrictions.

Trusted Nonprofit Resources

National Association of State Charity Officials (NASCO)

The National Association of State Charity Officials (NASCO) is an association of state offices charged with oversight of charitable organizations and charitable solicitation in the United States.  They have taken a leadership role in promoting uniform state charity registration and filing requirements, amicus briefs, and multistate lawsuits targeting fundraising deception. NASCO members have also participated in drafting the Uniform Law Commission’s Oversight of Charitable Assets Act which is a model for state solicitation law and jurisdictional guidelines for state regulation of charitable solicitation on the Internet.

National Council of Nonprofits (Council of Nonprofits) 

The National Council of Nonprofits (Council of Nonprofits) is a trusted resource and advocate for America’s charitable nonprofits. Through their powerful network of State Associations and the nation’s largest network of nonprofits they serve as a central coordinator and mobilizer to help nonprofits achieve greater collective impact in local communities across the country. They identify emerging trends, share proven practices, and promote solutions that benefit charitable nonprofits and the communities they serve.

Association of Fundraising Professionals (AFP)

The Association of Fundraising Professionals (AFP) represents more than 30,000 members in over 230 chapters throughout the world, working to advance philanthropy through advocacy, research, education and certification programs.  The association fosters development and growth of fundraising professionals and promotes high ethical standards in the fundraising profession.

National Association of Attorney Generals (NAAG)

The National Association of Attorneys General (NAAG) was founded in 1907 to help attorneys general fulfill the responsibilities of their office and to assist in the delivery of high-quality legal services to the states and territorial jurisdictions. The Association’s members are the attorneys general of the 50 states and the District of Columbia and the chief legal officers of the Commonwealths of Puerto Rico (Secretary of Justice) and the Northern Mariana Islands, and the territories of American Samoa, Guam, and the Virgin Islands.

Your Local State Charity Office

We have a blog devoted with a list of the State Charity offices!! Almost all states have an association devoted to nonprofit assistance no matter where your organization is in its life-cycle. Whether you just need a form or something more complex they will most likely have the answer. Most state associations offer online training, research and local events that you can attend to get more familiar with your fellow non-profiteer!

GuideStar 

GuideStar encourages nonprofits to share information about their organizations openly and completely. They combine the information that nonprofits supply them with data from several other sources to provide information that advances transparency, enables users to make better decisions, and encourages charitable giving.

Please contact us with any comments, questions or concerns at (800)780-6027 or support@SimpleCharityRegstration.com.

 

3 Factors Affecting Your Nonprofit Registration Timeline

One of the most frequently asked questions we get in our support email is “How long will it take to get my charity registered”.  That depends on 3 factors: organizational paperwork preparedness, number of states registering, and the state office for which you are registering.

Prior to beginning the process you should have all of the following paperwork/information in hand to facilitate completing the questions that are required to fill in the forms. If you look at the left-hand side on the SimpleCharityRegistration.com website the navigation bar divides the questions by topic.  The sections will give you a sense of the types of required information you will need. You can even click on the sections ahead before entering information to see what you will need next.

Organizational Paperwork

In addition to the 990, 990-EZ, 990-PF or other financial reporting you will need:

  • Info on the origins of the charity, such as formation date and state, 501(c) designation and date or application date, organization type, purpose, mission, etc.
  • if this is an initial registration in states, you will also need to attach the articles of incorporation and by-laws
  • list of sources of government grants
  • personnel — list of board members with addresses (usually a business address other than the charity), key employees and their salaries and positions, and information about whether any of these people have connections to other related organizations or have any interaction with government agencies or courts
  • list of any paid professional fundraisers used by your charity along with their contracts and terms
  • a list of chapters, branches or offices of the organization
  • a list of resident agents for the states required as explained on the right side of the Resident Agent page

Most of these items are for answering the questionnaire, but some, like the articles of incorporation and by-laws, will need to be copied and attached to the registration form upon submission.

For the data entry, depending on the size of your organization, you should allow a few days just in case you need to contact other administrators in your office for missing information. The next step is proofing and putting the packages together. Add some signatures and stamps and you are on your way.

Number of States

The best part about having an account with SimpleCharityRegistration.com is once all the information is in the software printing and preparing each consecutive state application becomes easier and the next year when it is time to renew you only need to review the prior year’s information and add the current financials and you are on your way to knocking this once burdensome process right out of the park!!

States Where Registering

Depending on the time of year and which states you are registering the time for approval can take a couple of business days up to 6 weeks or more.  Take note of the renewal date for each state when registering as you know that will be the time of year the state offices will be the busiest and your initial registration application may take a little longer.

You may also enjoy our new welcome video and our two-part blog on this topic.

Please contact us with any comments, questions or concerns at (800) 780-6027 or support@SimpleCharityRegstration.com.

Religious Exemption from Charity Registration – Do You Qualify?

What Does Religious Exemption Mean Regarding State Compliance?

Our blog on religious exemption at the federal level started with a joke, so here we go again (sort of).

A few years ago, the show How I Met Your Mother had a running gag that Canadians were afraid of the dark. After the lights go out in a Canadian expat bar in New York and everyone complains, the exasperated and defeated Canadian on the show asserted, “Nobody likes the dark.”

And so it goes with state compliance for charities. It is fair to say that, “Nobody likes state charitable solicitation registration.” Those who have the slightest inclination that they might be exempt are eager to find that they are, but some exemption criteria are hard to understand from state to state. Religious exemption is primary among those because state definitions vary.

So, how do you tell if you’re exempt from state charitable solicitation registration?

  1. Churches and their integrated auxiliaries – In nearly every state, if not all, churches and their integrated auxiliaries are exempted from charitable solicitation registration, either by:
    1. not being included in the definition for charitable organization
      1. (ex. Mississippi for churches; Pennsylvania), or
    2. by being given a direct exemption because no 990 is required by IRS
      1. (ex. Alaska, Colorado, Minnesota)
  2. Religious organizations required to file a 990 will need to
    1. file in some states
      1. (ex. Alaska, Virginia, West Virginia); and
    2. will be exempt in others
      1. (ex. Connecticut, Rhode Island, Utah).

You may find the summary of religious exemptions provided by the National Council of Nonprofits to be helpful for you.

In addition, if you open a free, no-obligation account on Simple Charity Registration, you will find the exact wording of the state exemption questions and links to where you can find the legal definitions to assist you. Plus, if you determine that you must register or that you need to apply for exemption, or write to the state to get confirmation that you are exempt, you can proceed to do so using our 4 Simple Steps to Compliance.

We can show you that you no longer need to be afraid of the dark!

Please contact us with any comments, questions or concerns at (800)780-6027 or support@SimpleCharityRegstration.com.

This information is not intended as legal advice or instruction.

North Dakota Corporate Registration/Qualification

Out of state charitable corporations must obtain a certificate of authority from the Secretary of State office if they conduct activities in North Dakota which includes soliciting for donations.  A non-profit corporation can do this by filing a Certificate of Authority Foreign Corporation Application (SFN 13100).

A foreign corporation using a name other than its corporate name must also file the Trade Name Registration Form (SFN 13401) and renew annually.

You will need to have a Registered Agent for filing the Certificate of Authority Foreign Corporation Application which can be provided by a service or an individual residing in North Dakota. If your organization is registering nationwide you are going to need registered agents for several states so we recommend using a national agency so that you only have one point of contact for that service. Here is the link to the blog we posted earlier in the year on the role of Registered Agents in state charity registration process.

For more information on corporate registration, review the North Dakota Secretary of State’s website or you could read up on Corporate Registration and Registered Agents on our blog.

Please contact us with any comments, questions or concerns at (800) 780-6027 or support@SimpleCharityRegstration.com.

Oregon Corporate Registration/Qualification

Out-of-state charitable corporations must register prior to solicitation with the Department of Justice Charitable Activities Section.  Those forms can be found on SimpleCharityRegistration.

Nonprofit corporations organized in another state which solicit, hold assets or do business in Oregon must also register with the Oregon Secretary of State Corporations Division. They must file an Application for Authority to Transact Business-Nonprofit which can be submitted by mail or online at the Oregon Business Registry.  The annual renewal must be done online by February 1st of each year.

You will need to have a Registered Agent for service of process filing as a Foreign Non-profit can be provided by a service or an individual residing in Oregon. An entity cannot designate itself as its own registered agent.  If your organization is registering nationwide you are going to need registered agents for several states so we recommend using a national agency so that you only have one point of contact for that service. Here is the link to the blog we posted earlier in the year on the role of Registered Agents in state charity registration process.

Please contact us with any comments, questions or concerns at (800) 780-6027 or support@SimpleCharityRegstration.com.

DC Corporate Registration/Qualification

Nonprofits must file for a basic business license in DC which in lieu of completing a charity registration application.  This includes completing corporate registration with the FN-1 Form as a foreign entity conducting business in DC. The best way to register in DC is online through the Department of Consumer and Regulator Affairs (DCRA), Corporations Division, CorpOnline Web Portal.

It is best to register through their portal as you can track your progress from the corporate registration to the tax exempt application and then on to registering your non-profit as a business with the BBL-EZ Form.

You will need to have a Registered Agent for filing both as a Foreign Non-profit and for completing the BBL-EZ application both can be provided by a service or an individual residing in DC. If your organization is registering nationwide you are going to need registered agents for several states so we recommend using a national agency so that you only have one point of contact for that service. Here is the link to the blog we posted earlier in the year on the role of Registered Agents in state charity registration process.

If you plan on using a name in DC other than your registered corporate name, you also will need to register that Trade Name.

Please contact us with any comments, questions or concerns at (800) 780-6027 or support@SimpleCharityRegstration.com.

Demystifying State Charity Registration – Webinar

For many nonprofits, this time of year brings anxiety from multi-state charity registration requirements. Whether you are looking at register for the first time or renewing, it can be overwhelming. SimpleCharityRegistration.com can help you manage this heavy load.

Simple Charity Registration is an affordable form automation software designed to reduce the amount of time and resources it takes your organization to fulfill your state charity compliance needs. How can SimpleCharityRegistration help you accomplish your mission?

4 Simple Steps:

  1. Identifying up front which states your organization will need to register in and in which states you may be exempt from registration requirements
  2. Collecting all information necessary to file up-to-date state specific forms (registration, renewal, exemption, or extension), with instructions and resources all in one place
  3. Sending email reminders of renewal and annual financial due dates, saving you from missed deadlines and penalties
  4. Storing your data from one year to the next, available to you at any time to add a new state or renew a previous one, keeping you compliant

Laptop

4 Simple Steps to Compliance Video

Simple Charity Registration is designed to allow you to do your registration in parts as you have the information available, making now the perfect time to get started on your registrations and renewals while waiting for your financials to be complete.

Simple Charity Registration looks forward to helping you spend more of your valuable resources on your mission while staying compliant.

Join Us for a free, 30-minute webinar on Wednesday, April 5, at 3:00 pm ET.

Register Now

 

Here are some other resources that will be helpful throughout the registration process: GuideStar’s blog on State Registration Requirements for Fundraising, our blogs on what to prepare for registration and how Simple Charity Registration can help.

Please take a minute to visit our website www.SimpleCharityRegistration.com and create a free account or contact us to learn more 800.780.6027 support@simplecharityregistration.com.

Thank you
Your Simple Charity Registration Support Team