Nonprofit regulation in North Dakota
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Nonprofit regulation in North Dakota 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.
North Dakota 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 North Dakota organization or based out-of-state. In North Dakota a smaller number of groups and organizations are exempt from registration.[1]
North Dakota 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.
- 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]
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 North Dakota Secretary of State is the authority in the state that oversees rules governing donor solicitation and registration.
See law: North Dakota Century Code, Chapter 50-22
Registration requirements[edit]
Any nonprofit group or organization located in North Dakota, unless exempt, must register with the North Dakota Secretary of State. Any non-exempt nonprofit, in any state, intending to solicit in North Dakota must also register, along with anyone intending to solicit in North Dakota 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 large number of groups are exempt from registering in North Dakota. The following are exempt from registering:[1]
- Tax-exempt religious organizations that are not required to file IRS Form 990
- Institutions of higher learning
- Appeals for named individuals
- Volunteer organizations that solicit funds for a government entity, or for a civic or community project
- Political groups regulated by state or federal commissions
- Political candidates
Procedures[edit]
Nonprofits registering in North Dakota can use either the Unified Registration Statement (URS) form or the state form. Organizations located outside North Dakota must additionally submit Certificate of Authority-Foreign Corporation Application, Form SFN 13100 and name a registered agent residing in North Dakota.[1]
Documents[edit]
The following documents are required along with your registration form:[1]
- IRS determination letter (if an organization's status is pending, they must send the first page of IRS Form 1023)
- IRS Form 990 or financial statements; if an organization has no 990, they must complete Item 12 on the North Dakota state registration form
- Copies of contracts with professional fundraisers
Signature and fee[edit]
One signature of an organization officer is required, and must certify "that the registration statement is being filed on behalf of the organization pursuant to a board resolution."[1]
The registration fee is $25. Out-of-state groups must also pay $50 for the Certificate of Authority, and submit a Certificate of Good Standing or Certificate of Existence from the state or country of incorporation.[1]
Filing procedures[edit]
Registration materials must be mailed to:[1]
Secretary of State
State of North Dakota
600 E. Boulevard Avenue, Department 108
Bismark, ND 58505
Renewal[edit]
There is no need to renew the initial registration. An annual financial report, however, must be submitted every year and is described below.[1]
Financial reporting[edit]
Organizations must file an annual financial report by September 1 each year. Unlike in years past, North Dakota no longer requires an IRS Form 990 for the annual report; instead, organizations must report on the amount of money raised and spent in North Dakota on the state annual report form, Charitable Organization Annual Report, Form SFN 11302. The Unified Registration Statement (URS) form is not accepted for the annual report.[1]
Extensions[edit]
Extensions can be requested by writing or via an Extension for Charitable Annual Report form on or before September 1. Only one extension is granted each year and lasts until December 1.[1]
Fee[edit]
There is a $10 fee to submit the financial report.[1]
Recent news[edit]
The link below is to the most recent stories in a Google news search for the terms Nonprofit regulation North Dakota. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.
See also[edit]
External links[edit]
Footnotes[edit]
- ↑ 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
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