All organizations that have not raised money on GiveGab prior to September 18, 2017 will be required to attest that they are compliant with applicable state fundraising requirements before they can fundraise.
All organizations that have raised money on GiveGab prior to September 18, 2017 will have until January 15, 2018 to attest that they are compliant with applicable state fundraising requirements. After January 15, 2018, any organization that has not attested they are compliant will have their donations disabled.
This is in addition to verification steps that are already in place that include:
- Verifying tax-deductibility status according to the IRS, as well as
- Confirming that the organization has not been listed by the Office of Foreign Assets Control (OFAC) as a Specially Designated National (SDN) engaged in or supporting terrorism
- Confirming that the organization is in compliance with Anti-Money Laundering Federal Regulations including US PATRIOT, BSA and OFAC.
You can review your State Charitable Solicitation Compliance Attestation by logging into your GiveGab account and viewing your bank account information.
GiveGab is working with Harbor Compliance, an expert in Fundraising Compliance. Here are some additional questions and resources from Harbor Compliance for you to reference throughout this change.
What is state charitable solicitation registration?
Nonprofits are held to a high standard of government regulation and public scrutiny. And that is with good reason! Eligible 501(c) nonprofits are exempt from federal corporate taxes and have access to public funding. These benefits are not typically available to for-profit businesses, so laws are in place to protect the public and ensure nonprofits do not abuse their financial advantages. The IRS and states all have requirements for nonprofits.
Why is compliance important?
While 501(c) nonprofits receive key financial benefits, the penalties for noncompliance can be serious. The IRS can revoke a nonprofit’s tax exemption and impose fines that can accrue daily. The states can administratively dissolve a nonprofit corporation and levy steep financial penalties. Perhaps worst of all, an organization can lose out on a grant or large donation because it has not kept itself in good standing.
Taking a proactive approach to compliance helps ensure the sustained success of the organization. The cost of staying compliant is small in comparison to the much larger costs of noncompliance. The saying, “an ounce of prevention is worth a pound of cure” could not be more true in this context.
What are the key aspects of compliance?
The IRS provides tax exemptions to eligible nonprofits under IRC 501(c). Public charities and private foundations receive 501(c)(3) tax exemption. The IRS scrutinizes organizations when they apply for 501(c)(3) but also ensures that those organizations meet the ongoing obligations to remain eligible. Nonprofits must file a 990 tax form each year with the IRS to disclose their financial data for the year.
Each state has their own set of requirements. Nonprofits are typically incorporated in a given state as a nonprofit corporation. The state in which the nonprofit has incorporated will impose requirements on the nonprofit, and those responsibilities typically span across multiple state agencies. Usually nonprofits must submit an annual filing to the corporations division of the secretary of state, maintain its license to fundraise (charitable solicitation registration), file for a state business license, and maintain state-level tax exemption with the revenue department. As nonprofits expand outside of the state or operate nationwide, they must comply with the same items in each other state as well.
In addition to IRS and state filing requirements, nonprofits must keep adequate records. Keeping accurate and complete records is critical in the event that an organization is audited. It is also common that board members or donors request information from the organization. Finally, records are necessary for submitting applications and renewal filings with various government agencies.
When I check the box on GiveGab, what am I attesting to?
When you check the box you are attesting (defined as "declaring that something exists or is the case") that your organization is compliant with applicable state fundraising requirements in the states in which you may solicit donors using the GiveGab platform.
Do you have additional resources to reference?
Yes! Here are a few more resources from Harbor Compliance to help you:
- Guide and Overview of Many Nonprofit State by State Compliance Requirements
- Guide and Overview Specific to Fundraising Compliance
- National Council of Nonprofits and Harbor Compliance have partnered to create a white paper explaining the state charitable solicitation registration requirements.
- A Quick Summary of Charitable Solicitation in Graphic Form
- Executive Brief: Charitable Solicitation Registration (great for driving awareness and support with leadership and the board)
- State by State Links to the State Organizations that Regulate Charities, Solicitation, and Registrations
What if I need more assistance?
If you need more assistance with charitable solicitation requirements that the resources we have provided, we recommend working with Harbor Compliance.