Your monthly support provides voters the knowledge they need to make confident decisions at the polls. Donate today.
Nonprofit regulation in Colorado
 in Colorado |
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 Colorado 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.
Colorado 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 Colorado organization or based out-of-state. In Colorado a number of groups and organizations are exempt from registration. These groups are not required to apply for exempt status; it is automatic.[1]
Colorado is one of only seven states requiring registration that does not accept the Unified Registration System (URS).[2] Unlike 32 other states requiring registration that do allow the URS, those registering in Colorado must file through the state's electronic system.
- 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 Colorado Secretary of State's Licensing Division is the agency in the state that oversees rules governing donor solicitation and registration.
See law: Colorado Revised Statutes 6-16-101 through 6-16-104
Registration requirements
Any nonprofit group or organization located in Colorado, unless exempt, must register with the Colorado Secretary of State. Any non-exempt nonprofit, in any state, intending to solicit in Colorado must also register, along with anyone intending to solicit in Colorado 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.
Colorado has adopted the Charleston Principles, meaning that groups with "interactive" websites (websites where Colorado residents can make donations) that either target Colorado residents or regularly receive contributions from Coloradans must register if they are out-of-state.[1]
Exemptions
A number of groups are exempt from registering in Colorado. Any group, however, that meets the exemption requirements need not apply for exemption.
The following groups are exempt from registering:[1]
- If the group does not intend to raise more than $25,000, or receives contributions from less than 10 people throughout the year
- Religious organizations
- Political parties, candidates and political action committees
- Fundraising efforts for a single individual or family
Procedures
Nonprofits registering in Colorado cannot use Unified Registration System and must instead file electronically through the Secretary of State's online system.[1]
Documents
No documents are required beyond what is required during the online registration process.[1]
Signature and fee
Because registration occurs online, organizations receive user information and a password, which they will use to electronically sign. The signatory must be an authorized officer in a position to sign on behalf of the organization.
The registration fee is $10.[1]
Filing procedures
The entire registration process occurs online; no additional forms need to be sent.[1]
Renewal
Registration is valid for one year and must be renewed by the 15th day of the month after the end of the organization's fiscal year. There is a $10 fee to renew.[1]
Financial reporting
Organizations must file electronically an annual financial report by the 15th day of the fifth calendar month after the close of the organization's fiscal year.[1]
Extensions
Under IRS rules, any organization may receive an automatic three-month extension of time to file any IRS 990 forms. To receive an extension, however, an organization must fill out the "File Extension" form on the state website.[8][1]
Fee
There is no additional fee to submit the financial report.[1]
Additional requirements
Out-of-state groups that register under Colorado's solicitation laws must also obtain authorization to transact business in Colorado by filing electronically a Statement of Foreign Authority with the Colorado Secretary of State.
All groups in Colorado must also include a disclosure statement on every printed solicitation and receipt.[1]
Recent news
This section links to a Google news search for the term "Colorado + donor + privacy"
See also
External links
Footnotes
- ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 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
- ↑ Colorado Secretary of State, "Instructions for Requesting an Extension," accessed January 22, 2014
