Nonprofit regulation in New Mexico
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Nonprofit regulation in New Mexico 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 Mexico 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 Mexico organization or based out-of-state. In New Mexico a number of groups and organizations are exempt from registration.[1]
New Mexico is one of 32 states that allows registrants to use either the Unified Registration Statement (URS) (if given permission by New Mexico) or the online state system.[2] Only seven states requiring registration do not accept the URS. New Mexico is one of very few states that allow online registration.
- 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
According to the Foundation Center, there are over 1.5 million nonprofit organizations in the United States.[5] 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).[6]
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.”[7] 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.[4]
Governing agencies
The New Mexico Attorney General is the authority in the state that oversees rules governing donor solicitation and registration.
See law: New Mexico Statutes sections 57-22-1 through 57-22-11
Registration requirements
Any nonprofit group or organization, unless exempt, located in New Mexico must register with the New Mexico Attorney General. Any non-exempt nonprofit, in any state, intending to solicit in New Mexico must also register, along with anyone intending to solicit in New Mexico on behalf of a nonprofit. Non-exempt 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.
Exemptions
A number of groups are exempt from registering in New Mexico. The following are exempt from registering:[1]
- Religious organizations
- Educational institutions, including groups like parent-teacher associations
- Appeals for named individuals, assuming all money goes to the named person
Procedures
Nonprofits registering in New Mexico can technically use the Unified Registration Statement (URS) form or the online state system. Because the registration process is intended to occur online, the URS may be used only by organizations that have been given special permission by the state. They must specifically show that they are unable to electronically register.[8][1]
Documents
The following documents are required along with your registration (since registration occurs online, documents must be notarized copies of originals):[1]
- IRS Form 1023 or 1024
- Articles of incorporation
- Bylaws
- IRS Form 990, if available
- If an organization received more than $500,000, they must include an audit by a Certified Public Accountant
- Note: tax forms electronically filed must include a copy of the signed e-file signature page.[1]
Signature and fee
An e-signature of the Chief Financial Officer or another authorized officer is required.
There is no fee to register.[1]
Filing procedures
Registration occurs entirely online (except in the case of groups that have proven they cannot submit electronically, who must use the URS).[1]
Renewal
There is no renewal needed; an annual financial report, however, is required.[1]
Financial reporting
Financial reports are due annually, within six months of the close of an organization's fiscal year. It should be online, through the state online system. Organizations must also upload their most recent IRS Form 990 and all attachments, except copies of the schedule of contributors attached to the 990.[1]
Extensions
Extensions of up to five and a half months are available by filing an IRS Form 8868 with the IRS and then giving the New Mexico Attorney General a copy, electronically. Extensions must be requested no later than six months after the end of your fiscal year.
If an organization received less than $50,000 and is not required to file an IRS Form 990, it does not need to file a 990 with New Mexico. Even if an organization received less than $50,000, however, they still need to file an IRS Form 990-N. If an organization received more than $500,000, it must upload an electronic copy of an audit by a Certified Public Accountant.[1]
Fee
There is no fee to submit the financial report.[1]
Recent news
This section links to a Google news search for the term "New + Mexico + donor + privacy"
See also
External links
Footnotes
- ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 Fishman, S. & Barrett, R. (2012). Nonprofit Fundraising Registration: The 50 State Guide. NOLO.
- ↑ "Multistate Filing Form," accessed December 17, 2014
- ↑ Guidestar, Fundraising: What Laws Apply?" accessed February 18, 2015
- ↑ 4.0 4.1 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
- ↑ Multistate Filing, "New Mexico," accessed February 2, 2015
