Nonprofit regulation in New York
 in New York |
| Civil Liberties Policy |
|---|
|
| Nonprofit regulation |
| Privacy Policy Project |
| State information |
 |
Nonprofit regulation in New York involves a complex set of rules that govern nonprofit organizations and charitable giving throughout the state. Major issues surrounding nonprofit regulation nationwide include the following:
- contribution limits,
- donor disclosure, and
- the redefinition of issue advocacy.
New York is one of 39 states that require charitable organizations, and those intending to solicit on their behalf, to register with the state in order to solicit contributions, whether they are a New York organization or based out-of-state. In New York, a number of groups and organizations are exempt from registration. These groups must file for exemption; it is not automatic.[1]
New York is one of three states (along with California and Florida) that require organizations to file copies of IRS Form 990 Schedule B attachments, which list names and addresses of contributors who gave over $5,000.[2]
New York is also one of 32 states that allows registrants to use either the Unified Registration Statement (URS) or the state registration form.[3] Only seven states requiring registration do not accept the URS.
- Note: The following is not a how-to guide in managing an organization's registration and reporting requirements, but rather an attempt to share information about the relative degree of regulation governing nonprofit charitable activity at the individual state level. The information on this page was last updated in early 2015.
Background
While the Internal Revenue Service designates eligible nonprofit charitable organizations with a federal tax exempt status, individual states require their own level of regulation and reporting, particularly when organizations attempt to solicit fundraising contributions. Research shows that attempts to make contributions more transparent has an unintended negative effect on the number of contributors who give, as well as the amount.[5] The amount of regulation required differs by state, as does the degree to which state regulations protect the privacy of individual donors. Three states, for instance, require annual copies of IRS Form 990 (schedule B), which lists individual contributors who contribute over a specified amount.
According to the Foundation Center, there are over 1.5 million nonprofit organizations in the United States.[6] Section 501 of the U.S. tax code outlines which types of nonprofit organizations may be granted tax exempt status by the Internal Revenue Service. The section of this code that provides for exemption is section 501(a), which states that organizations are exempt from some federal income taxes if they fall under sections 501(c) or 501(d), or under section 401(a).[7]
Organizations classified as 501(c)(3) are nonprofit charitable, religious and educational organizations. These include organizations like the Red Cross and Habitat for Humanity as well as the American Civil Liberties Union and the Lucy Burns Institute, which provide, as defined in the federal code, “instruction of the public on subjects useful to the individual and beneficial to the community.”[8] Organizations granted 501(c)(4) status are political education organizations, and can engage in political lobbying. This includes donations to political committees that support or oppose ballot measures, bond issues, recalls or referenda. 501(c)(4) organizations can thus engage in issue advocacy, but they are not allowed to expressly advocate for the election or defeat of a particular candidate.
While the Internal Revenue Service designates eligible nonprofit charitable organizations with a federal tax exempt status, individual states require their own level of regulation and reporting, particularly when organizations attempt to solicit fundraising contributions. The amount of regulation required differs by state, as does the degree to which state regulations protect the privacy of individual donors. Three states, for instance, require annual copies of IRS Form 990 (schedule B), which lists individual contributors who contribute over a specified amount. Research shows that attempts to make contributions more transparent has an unintended negative effect on the number of contributors who give, as well as the amount.[5]
Governing agencies
The New York Attorney General's Charities Bureau is the agency in the state that oversees rules governing donor solicitation and registration.
See law: New York Executive Law, Article 7a, sections 171-a through 177
Registration requirements
[[File:Seal of the Attorney General of New York.jpg|thumb|Seal of the Attorney General of New York|link=Attorney General of New York] Any nonprofit group or organization located in New York, unless exempt, must register with the New York Attorney General's Charities Bureau. Any non-exempt nonprofit, in any state, intending to solicit in New York must also register, along with anyone intending to solicit in New York on behalf of a nonprofit. Nonexempt nonprofits might include traditional charitable organizations like the Red Cross or Habitat for Humanity, educational or policy organizations like the American Civil Liberties Union, or issue advocacy groups like the League of Conservation Voters.
New York takes the view that any group with a website accessible to New Yorkers on which they can accept donations through a "Donate Now" button is soliciting and must register. Additionally, any organization that holds money or owns property in New York may have to register under the Estates, Powers, and Trusts Law. This registration can be done at the same time as solicitation registration.[9][10]
Exemptions
A number of groups are exempt from registering in New York. These groups must file for exemption; it is not automatic. In order to file, groups must submit the Registration Statement for Charitable Organizations and include Schedule E, Request for Registration Exemption. Unregistered organizations that are exempt from registration are not required to file for exemption.[1]
The following groups are exempt from registering:
- Any organization that receives less than $25,000 from New York state and had no paid fundraising staff (only contributions from New York count toward that limit)
- Organizations receiving an allocation from United Way or other incorporated community appeal, if they received less than $25,000 and used volunteer fundraising
- Organizations receiving substantial contributions from a single government agency that requires recipients to submit an annual financial report, and which used no paid fundraisers
- Religious organizations
- Educational institutions
- Parent-teacher associations
- Membership organizations, where member dues are their only solicitation
- Appeals for single individuals (organizations must file a Charitable Registration for the Relief of an Individual (Form CHAR017) in the event that the intended contributions cannot be dispersed)
- Organizations operating with a certificate from the New York Department of Health, which lists them as either "hospital," "skilled nursing facility," or "diagnostic and treatment center."
- Cemeteries (if their certificate of incorporation shows that the organization was incorporated under Article 15 of the New York Not-For-Profit Corporation Law)
- Government agencies
- Law enforcement support groups; historical societies; veterans groups; volunteer firefighters organizations; and ambulance service organizations, assuming no paid fundraising staff were employed
Procedures
Nonprofits registering in New York can use either the Unified Registration Statement (URS) form or the state form.[1]
Documents
The following documents are required along with your registration form:
- Certificate of incorporation
- Bylaws
- IRS exemption application (IRS Form 1023 or 1024) and IRS determination letter, if available
Signature and fee
Signatures of both the organization's president or another authorized officer and the Chief Financial Officer or treasurer are required; notarization is not required.
The registration fee is $25.
Filing procedures
Registration materials must be mailed to:
New York State Department of Law (Office of the Attorney General)
Charities Bureau, Registration Section
120 Broadway
New York, NY 10271
Renewal
There is no need to renew an organization's registration.
Financial reporting
Organizations must file an annual financial report within four and half months of the close of their fiscal year; if using the calendar year, then they must file by May 15th. Organizations must complete form CHAR500, Annual Filing for Charitable Organization, or Form 500-C Combined Annual Financial Report. The Unified Registration Statement (URS) is not acceptable for filing annual reports.
Organizations must include a copy of their IRS Form 990, 990-EZ, or 990PF and 990-T (if applicable) with schedules. New York is one of three states that require the inclusion of IRS Form 990 Schedule B attachment. An accountant's review of the organization's revenue is required if they received between $100,000 to $250,000; an accountant audit is required if revenue exceeded $250,000.
Extensions
Extensions for up to three months are available by emailing charities.extensions@ag.ny.gov and including IRS Form 8868 Application for Extension for Time to File an Exempt Organization Return.
Fee
There is a $10 fee to submit the financial report if an organization's revenue is less than $250,000; $25 if an organization's revenue exceeds $250,000. Organizations registered under the Estates, Powers, and Trusts Law may have to pay a filing fee on a sliding scale ranging from $25 to $1,500.[1]
Additional requirements
All nonprofits in New York must include a disclosure statement on every solicitation and communication.[1]
Recent news
This section links to a Google news search for the term "New + York + donor + privacy"
See also
External links
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 Fishman, S. & Barrett, R. (2012). Nonprofit Fundraising Registration: The 50 State Guide. NOLO.
- ↑ Labyrinth, Inc, "IRS 990 Schedule B Required With Registration," August 28, 2013"
- ↑ "Multistate Filing Form," accessed December 17, 2014
- ↑ Guidestar, Fundraising: What Laws Apply?" accessed February 18, 2015
- ↑ 5.0 5.1 5.2 London School of Economics, "Campaign finance laws that make small donations public may lead to fewer people contributing and to smaller donations," January 7, 2015
- ↑ Foundation Center, "Frequently Asked Questions," accessed December 17, 2014
- ↑ Cornell University Law School, "26 U.S. Code § 501 - Exemption from tax on corporations, certain trusts, etc," accessed January 13, 2015
- ↑ Cornell University Law School, "26 CFR 1.501(c)(3)-1 - Organizations organized and operated for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals," accessed January 13, 2014
- ↑ Harbor Compliance, "New York Fundraising Registration," September 10, 2014
- ↑ Nolo, "Nonprofit Fundraising Registration Rules for New York," accessed May 5, 2015
