Charitable organizations play a crucial role in addressing various societal issues, and their ability to solicit donations is essential for their sustainability. In the state of Washington, nonprofits must navigate specific rules and regulations governing charitable solicitations to ensure compliance and maintain their reputation. In this blog post, I will delve into the key aspects of charitable solicitations by nonprofits in Washington State.
Understanding Charitable Solicitations
A Charitable solicitation refers to the act of requesting donations from the public to support a nonprofit organization’s mission or its activities which can take various forms, including fundraising events, direct mail campaigns, and online donation drives. Washington state is unique in that nonprofits may also make solicitations via games of chance including, social card and dice games, golfing sweepstakes, turkey shoots, raffles, bingos, and amusement games without having to register with the Washington State Gambling Commission. See https://wsgc.wa.gov/sites/default/files/public/5-204b-unlicensed-gambling-activities-nonprofit.pdf. Please be aware that fundraising with games of chance may require additional disclosures on the Form 990 and may impact tax-exemption status or your application.
Nonprofits in Washington State must register with the Washington Secretary of State’s Charities Program before engaging in any solicitation activities. The form for registration can be found online at: https://www.sos.wa.gov/sites/default/files/2022-10/21—tr-registration.pdf?uid=64f753645b1a7 Registration ensures transparency and accountability in fundraising efforts. Any nonprofit corporation that receives more than $50,000 in contributions must register with the Secretary of State. If a nonprofit corporation receives less than $50,000 but has employees, uses a commercial fund raiser, or pay others to carry out the activities of the organization then that organization must also register for charitable solicitation. See https://www.sos.wa.gov/sites/default/files/2022-10/ch—self-assessment-guide.pdf?uid=64f75364583e0
When engaging in activities outside the state of Washington there may be different registration requirements. If a nonprofit corporation maintains a website with a donation button, it is advisable that the nonprofit seeks compliance in every jurisdiction that it receives donations from.
Initial Registration for Charitable Solicitations
When registering with the Secretary of State’s office to receive charitable solicitation you should include:
- The Charitable Trust Initial Registration Form (https://www.sos.wa.gov/sites/default/files/2022-10/21—tr-registration.pdf?uid=64f753645b1a7)
- Articles of Incorporation;
- The corporation’s UBI;
- IRS determination letter (if applicable);
- The Form 990, other tax document; or a First Accounting Year End Date and Beginning Gross Asset list (if applicable); and
- A complete list of all legal actions for the last 10 years of the nonprofit corporation or anyone listed in the Charitable Solicitation Application, if applicable.
Annual Renewal For Charitable Solicitations
Charitable organizations must renew their registration annually. This renewal includes updating any changes in the organization’s leadership, contact information, and financial reports. Failure to renew can result in fines and penalties.
Nonprofits in Washington State are required to provide donors with certain disclosures during solicitations. The type of disclosure varies based on the method of disclosure. See https://www.sos.wa.gov/corporations-charities/nonprofits-charities/info-charities/disclosure-requirements In general, the disclosures must, at a minimum, contain:
- The name of the person making the request; and
- The charitable organization and the city of its principal place of business; and
- The published number and web site of the Secretary of State’s office, if requested, for the donor to obtain additional financial or other information on file with the secretary at 1-800-332-4483 www.sos.wa.gov/charities
Please note that there may also be federal disclosure requirements depending on the size of the contribution. Those may include a donor substantiation requirements on gifts more than $250.00. This is outside the scope of this post.
Penalties for Non-Compliance
Failure to comply with Washington State’s charitable solicitation regulations can result in fines, damage to an organization’s reputation, and anyone convicted of crimes being unable to register for charitable solicitation status in the future. See RCW 11.110.140 and RCW 19.09.020(2). It is essential for nonprofits to stay informed and follow these rules diligently.
In conclusion, charitable solicitations are the lifeblood of nonprofit organizations, allowing them to carry out their missions and make a positive impact on society. In Washington State, adherence to registration and disclosure requirements is crucial to maintain public trust and ensure transparency in fundraising efforts. By understanding and complying with these regulations, nonprofits can continue to thrive and effectively support their communities. Remember, staying compliant not only preserves your organization’s reputation but also strengthens the bond between you and your donors, fostering long-term support for your cause.
If you have any questions or concerns about charitable solicitations and registrations, please feel free to reach out to me at email@example.com or if you want additional information, please visit our website or check out this other post, Online Charitable Solicitations: 4 Tips for Using the “Donate Here” Button. One final note, this blog is for educational purposes and does not constitute legal advice. This article, or contacting the Apex Law Group, does not form an attorney client relationship.