Nonprofit regulation in Ohio
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Nonprofit regulation in Ohio 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.
Ohio 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 an Ohio organization or based out-of-state. In Ohio a number of groups and organizations are exempt from registration.[1]
Ohio is one of several states that allows registrants to use an entirely online system, and no longer uses the Unified Registration Statement (URS) or an individual state registration form.[2][3] Only seven states requiring registration do not accept the URS in lieu of their own individual state form or process.
- 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.[6] 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).[7]
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.”[8] 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.[5]
Governing agencies
The Ohio Attorney General, Charitable Law section is the agency in the state that oversees rules governing donor solicitation and registration.
See law: Ohio Revised Code sections 1716.01 through 1716.99
Registration requirements
Any nonprofit group or organization located in Ohio, unless exempt, must register with the Ohio Attorney General, Charitable Law section. Any non-exempt nonprofit, in any state, intending to solicit in Ohio must also register, along with anyone intending to solicit in Ohio 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 number of groups are exempt from registering in Ohio. Organizations can ask for a determination on their exemption by making a written request to the Ohio Attorney General, Charitable Law section. Alternatively, they can request exemption through the state online filing system.
The following groups are exempt from registering:[1]
- Any organization with revenue less than $25,000 and no primary paid fundraising staff (though salaried staff can do some fundraising, but not primarily as their main role; government grants and membership dues do not count toward the $25,000 threshold)
- Religious groups
- Educational institutions
- Membership organizations, where groups solely solicit members
Procedures
Nonprofits registering in Ohio must use the state online filing system.[1]
Documents
The following documents are required along with your registration form:[1]
- Articles of incorporation
- Bylaws
- IRS determination letter, if any
Signature and fee
One signature of a trustee or officer is required.
The fee to register is based on a sliding scale ranging from $0 to $200, determined by the previous year's contributions. Organizations that cannot determine precise contributions may estimate and provide an explanation.[1]
Filing procedures
All registration materials must be uploaded during the online registration process.[1]
Renewal
Organizations must renew their solicitation registration each year. They must do so no later than four and half months after the close of their fiscal year, or by May 15th if using the calendar year. The Attorney General does not grant extensions, though Ohio abides by extensions granted by the IRS. The renewal process is same as initial registration; so is the fee.[1]
Financial reporting
There are no annual financial reporting requirements beyond that required in the annual renewal process.[1]
Recent news
This section links to a Google news search for the term "Ohio + donor + privacy"
See also
External links
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Fishman, S. & Barrett, R. (2012). Nonprofit Fundraising Registration: The 50 State Guide. NOLO.
- ↑ "Multistate Filing Form," accessed December 17, 2014
- ↑ Ohio Attorney General, "Frequently Asked Questions," accessed February 3, 2015
- ↑ Guidestar, Fundraising: What Laws Apply?" accessed February 18, 2015
- ↑ 5.0 5.1 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
