Nonprofit regulation in Washington

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Nonprofit regulation in the states
Nonprofit organization
IRS code, section 501

## Contents

* 1 Background
* 2 Governing agencies
* 3 Registration requirements
* 3.1 Exemptions
* 3.2 Procedures
* 3.3 Documents
* 3.4 Signature and fee
* 3.5 Filing procedures
* 3.6 Renewal
* 4 Financial reporting
* 5 Additional requirements
* 6 Recent news
* 7 See also
* 8 External links
* 9 Footnotes

Nonprofit regulation in Washington 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.

Washington 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 Washington organization or based out-of-state. In Washington a number of groups and organizations are exempt from registration. Organizations that are exempt have the option of registering as such; it is not required but encouraged.[1]

Washington is one of 32 states that allows registrants to use either the Unified Registration Statement (URS) or the state registration form.[2] Only seven states requiring registration do not accept the URS.

According to Guidestar, an organization that reports on nonprofit companies, regulation of nonprofit activity protects donors and organizations from potential fraud and helps "to maintain trust in the [nonprofit] sector." According to the London School of Economics, nonprofit disclosure requirements can create privacy concerns among potential donors, thereby having an unintended negative impact on donor participation.[3][4]

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[edit]

IRS building in Washington, D.C.

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[edit]

The Washington Secretary of State's Charities Program is the agency in the state that oversees rules governing donor solicitation and registration.

See law: Revised Code of Washington sections 19.09.020 through 19.09.560

## Registration requirements[edit]

Seal of Washington

Any nonprofit group or organization, unless exempt, located in Washington must register with the Washington Secretary of State's Charities Program. Any non-exempt nonprofit, in any state, intending to solicit in Washington must also register, along with anyone intending to solicit in Washington 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[edit]

A number of groups are exempt from registering in Washington. Organizations that are exempt have the option of registering as such; it is not required but encouraged.

The following groups are exempt from registering:[1]

* Organizations that raise less than $50,000 and are run entirely by unpaid staff
* Religious groups (though religious groups that file an IRS Form 990 with the IRS are not exempt)
* Any one with reporting duties to the Federal Election Commission or state commission
* Appeals for named individuals

### Procedures[edit]

Nonprofits registering in Washington can use either the Unified Registration Statement (URS) form or the state form. If using the URS, organizations also file the Washington State Unified Registration Addendum.[1]

### Documents[edit]

The following documents are required along with your registration form:[1]

* IRS determination letter
* If an organization has any contracts with fundraising professionals, it must submit Fundraising Service Contract Registration forms. An additional $20 fee is required to do so.

### Signature and fee[edit]

One signature from the president, treasurer or other authorized officer is required. It need not be notarized.

The fee to register is $60.[1]

### Filing procedures[edit]

Registration materials must be mailed to:[1]

Secretary of State
Charities Program
P.O Box 40234
Olympia, WA 98504

### Renewal[edit]

Registration must be renewed each year by the 15th day of the fifth month after the end of fiscal year, or May 15 if using the calendar year. Washington provides an automatic six and a half month extension; organizations are not required to file for it. The procedure is the same as filing for registration, though there are $50 late fees. The regular fee is $40 to file a renewal on-time.[1]

## Financial reporting[edit]

Financial reporting requirements are satisfied when completing the annual renewal process.[1]

## Additional requirements[edit]

Nonprofits in Washington must include a disclosure statement on every point of solicitation and communication.[1]

## Recent news[edit]

This section links to a Google news search for the term "Washington + donor + privacy"

Washington Donor Privacy News Feed

## See also[edit]

* Washington
* Washington Secretary of State
* IRS code, section 501
* Nonprofit organization

## External links[edit]

* Washington Secretary of State, Charities Program

## Footnotes[edit]

1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Fishman, S. & Barrett, R. (2012). Nonprofit Fundraising Registration: The 50 State Guide. NOLO.
2. ↑ "Multistate Filing Form," accessed December 17, 2014
3. ↑ Guidestar, Fundraising: What Laws Apply?" accessed February 18, 2015
4. ↑ 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
5. ↑ Foundation Center, "Frequently Asked Questions," accessed December 17, 2014
6. ↑ Cornell University Law School, "26 U.S. Code § 501 - Exemption from tax on corporations, certain trusts, etc," accessed January 13, 2015
7. ↑ 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

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