Nonprofit regulation in Virginia
 in Virginia |
This article does not contain the most recently published data on this subject. If you would like to help our coverage grow, consider donating to Ballotpedia.
| Civil Liberties Policy |
|---|
|
| Nonprofit regulation |
| Privacy Policy Project |
| State information |
 |
Nonprofit regulation in Virginia 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.
Virginia 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 Virginia organization or based out-of-state. In Virginia a number of groups and organizations are exempt from registration. Certain types of these groups must file for exemption.[1]
Virginia 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
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 Virginia Department of Agriculture and Consumer Services is the authority in the state that oversees rules governing donor solicitation and registration.
See law: Virginia Code sections 57-48 through 57-69
Registration requirements
Any nonprofit group or organization located in Virginia, unless exempt, must register with the Virginia Department of Agriculture and Consumer Services. Any non-exempt nonprofit, in any state, intending to solicit in Virginia must also register, along with anyone intending to solicit in Virginia 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 large number of groups are exempt from registering in Virginia. Certain types of these groups must file for exemption.
The following groups are exempt from registering and need not file for exemption:[1]
- Religious groups
- Political groups
- Red Cross
The following groups are exempt from registering and need to formally file for exemption and pay a $10 fee:[1]
- Groups that raise less than $5,000, or plan to raise less than $5,000 in the following year, and have no paid fundraising staff
- Nonprofits funded solely by grants
- Groups with solicitation confined to five or fewer counties
- Educational institutions
- Appeals for named individuals
- Health care institutions
- Civic groups, such as local service clubs and veterans' groups
- Tax-exempt labor unions
- Tax-exempt trade associations
- Virginia licensed nonprofit debt counselors
- Virginia agencies on aging
Procedures
Nonprofits registering in Virginia can use either the Unified Registration Statement (URS) form or the state form. Organizations using the URS must also include a Remittance Form.[1]
Documents
The following documents are required along with the registration form:[1]
- Articles of incorporation
- Bylaws
- IRS determination letter or copy of IRS Form 1023 or 1024, if pending
- Contracts with professional fundraisers
- If new, a board-approved budget for the present year
Signature and fee
Two signatures are required, one from the Chief Financial Officer and another from the president or other authorized officer. They do not need to be notarized.
The registration fee is $100 if a group has no financial history; if it does have a history, the fee is $100 plus a sliding scale depending on contributions, ranging from $30 to $325.[1]
Filing procedures
Registration materials must be mailed to:[1]
Virginia Department of Agriculture and Consumer Services
Office of Consumer Affairs
P.O. Box 526
Richmond, VA 23218
Renewal
Organizations must renew each year, no later than four and a half months after the close of each fiscal year or by May 15 if using the calendar year. Extensions are available for up to three months, and can only be allotted twice. The procedure is the same as the registration process. The fee is the same sliding scale.[1]
Financial reporting
Financial reporting requirements are satisfied when completing the renewal process.[1]
Recent news
This section links to a Google news search for the term "Virginia + donor + privacy"
See also
External links
Footnotes
- ↑ 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.
- ↑ "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
