Did you know that in order to legally solicit charitable contributions in Virginia, charitable organizations are required to be registered with the state prior to actually soliciting? On top of that, if you don’t qualify for an exemption (more on that later) you’ll need to renew your registration every year. You may think that being approved for tax-exempt status with the IRS is enough, but the IRS is a federal regulator only, and it doesn’t regulate charitable solicitations at all.
If you haven’t registered your organization, you’re not alone. A surprising number of nonprofits that rely on charitable contributions to fund their operations haven’t registered, which can expose the organization to penalties. For many nonprofits, particularly smaller ones, the good news is that the state offers various exemptions from the annual registration requirement, though you still have to apply for an exemption and be approved. For example, if you don’t expect to receive, and don’t actually receive, over $5,000 in charitable contributions, or if you are only soliciting your organization’s members, you may qualify for an exemption.
This is a complicated area – and I’m not even touching on soliciting in multiple states or soliciting online with a “Donate Now” button, which can get even more complicated. If you’re a representative of a nonprofit organization that receives charitable contributions, it’s something you should at least look into to make sure you’re in compliance or that you get into compliance quickly!
For more information on Virginia’s charitable solicitation regulations, check out their website. If you need our help completing your organization’s registration statement or your exemption application, don’t hesitate to contact us.