Nonprofits do not necessarily have to register in every state, but depending on their operations and the laws of each state, they may be required to. In this comprehensive guide, you’ll get the facts about multi-state registration for nonprofits, including registration requirements and penalties for non-compliance.
What is Nonprofit Multi-State Registration?
Nonprofit multi-state registration is the process of registering a nonprofit organization with multiple states to be eligible to solicit charitable donations in those states. Many nonprofits ask for contributions from donors nationwide and thus need to file registrations nationwide. This typically includes registering with each state’s attorney general’s office, and filing annual reports in order to remain in compliance in subsequent years. If an organization solicits contributions, but fails to register, it may face penalties for noncompliance.
Nonprofits can file with multiple states for other reasons as well. For instance if the nonprofit has offices and staff in multiple states this may require registration. This type of filing is called a corporate annual report and is typically made with the Secretary of State in these states. This is less common than the attorney general filings mentioned above, but may affect some nonprofits.
When are Tax Exempt Organizations Required to Register in Multiple States?
Each state has different laws, but generally any request for contributions triggers the registration requirements. A tax exempt organization may be required to register in multiple states if they solicit charitable donations from resident of other states. Furthermore, if the activities of an organization meet particular thresholds of fundraising activities, like hiring paid solicitors to raise money or engaging in multi-state campaigns, then they are likely required to register in those states. To know for sure you will need to check the state laws specifically or contact a multi-state registration expert such as Completely Compliant.
Are There Different Rules for 501(c)(3) and 501(c)(4) Organizations?
In general there are similar multi-state registration requirements for 501(c)(3) and 501(c)(4) organizations. However, there are differences in the requirements of a few specific states. The most prominent difference is that a few states may require registration from 501(c)(3) organizations, but not 501(c)(4) organizations. A 501(c)(4) nonprofit may file for an exemption from filing in Massachusetts, Nevada, New Hampshire, and New Mexico whereas an equivalent 501(c)(3) would not qualify to do so. Conversely, a 501(c)(3) can apply for an exemption in Missouri whereas a 501(c)(4) would need to register with the state. It is important to be familiar with the laws in those states from which you are fundraising. Consider talking with a multi-state registration expert if you are unsure about if your organization is affected by multi-state registration requirements.
What are the Benefits of Multi-State Nonprofit Registration?
Nonprofits that register in multiple states benefit in a variety of ways, informing donors as to their activities, providing evidence of standing for fundraising purposes, ensuring compliance with state laws and regulations, and avoiding fines associated with non-registration. Multi-state registration also provides a more comprehensive view into the operations of a nonprofit organization which can benefit activities related to fundraising and security.
How Do You Begin the Process of Multi-State Registration?
The first step in the multi-state registration process is to check with the state’s attorney general’s office, secretary of state’s office, or other governing entity in those states where you fundraise from to see if there are any special requirements for a nonprofit organization to register in multiple states. Most states define fundraising very broadly so if you are asking for contributions from an individual, a corporation, or a nonprofit, you should investigate the fundraising registration requirements in that state. Be sure to note all deadlines and contact information for registering properly. Additionally, it is important to determine the laws governing fundraising in each state.
After gathering all necessary information and completing the required paperwork, submit your registrations and receive confirmation that they were completed successfully. You will also receive information about when the renewal registrations are due in each of the states where you register. The renewal process to maintain your multi-state registrations is similar to the initial process of registering. However, in the renewal filing you will be asked for different types of information for the renewals. Renewal registrations typically require a lot of financial reporting and providing information about the nonprofit’s activities.
The Benefits of Outsourcing Your Multi-State Registrations.
The multi-state registration process is very complex. If you do the filings yourself you should fully expect to spend hundreds of hours of senior staff time filing these important registrations. Even with all that effort, be aware that some of your registrations will be rejected. The state regulators are very particular it can be very hard to know what answers the regulators are really looking for and keep up with form and law changes.
Since being able to legally fundraise is so pivotal to any nonprofit, you need to make sure that your filings are done correctly. That is where Completely Compliant can help. We specialize in filing multi-state registrations on behalf of charities and nonprofits and make sure your organization stays completely compliant. Completely Compliant is affordable. We will also will save you hundreds of hours which you then can use to focus on your mission. Contact us today for a free quote.