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Nonprofit regulation in South Carolina
 in South Carolina |
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Nonprofit regulation in South Carolina 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.
South Carolina 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 South Carolina organization or based out-of-state. In South Carolina a number of groups and organizations are exempt from registration.[1]
South Carolina is one of seven states that does not allow registrants to use the Unified Registration Statement (URS). They must use the state registration form or online system instead.[2][3] 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.[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 South Carolina Secretary of State's Division of Public Charities is the agency in the state that oversees rules governing donor solicitation and registration.
See law: South Carolina Code of Laws, sections 33-56-10 through 33-56-200
Registration requirements
Any nonprofit group or organization located in South Carolina, unless exempt, must register with the South Carolina Secretary of State's Division of Public Charities. Any non-exempt nonprofit, in any state, intending to solicit in South Carolina must also register, along with anyone intending to solicit in South Carolina on behalf of a nonprofit. Nonexempt 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 South Carolina. Exempt groups other than religious and political ones must file an annual Application for Exemption within four and a half months after the close of their fiscal year. There is no fee to file, and it can be done online or via mail.
The following groups are exempt from registering:[1]
- Any organization that received less than $20,000, had no professional fundraisers, and had no one employed making more than $500 a year
- Any group that took in less than $7,500 regardless of who raised it
- Religious groups
- Any political group required to file with the Federal Election Commission or State Election Commission
- Educational groups, assuming they don't have professional fundraisers
- Appeals for named individuals
- Any group soliciting solely from members
- Veterans' groups
- State agencies subject to disclosure rules under the Freedom of Information Act
Procedures
Nonprofits registering in South Carolina must either file online, or use the state form.[1][3]
Documents
A copy of your IRS determination letter is required along with your registration form.[1]
Signature and fee
Registration forms must be signed by the Chief Executive Officer and the Chief Financial Officer, though there is no need for notarization.
The registration fee is $50.[1]
Filing procedures
If not filing online, the registration materials must be mailed to:[1]
South Carolina Secretary of State
Attn: Division of Public Charities
1205 Pendleton St., Suite 525
Columbia, SC 29201
Renewal
Organizations must renew their registration each year, no later than four and a half months after the close of the fiscal year, or by May 15 if using the calendar year. They can file online or via the Registration for a Charitable Organization form; the URS is not accepted for renewal. The fee to renew is $50.[1]
Financial reporting
Organizations are required to submit annual financial reports. This can be done separately or simultaneously with the renewal process. The reporting requirement follows the same timeline as the renewal process. Reports can be submitted online or via an Annual Financial Report Form. It must include copies of an organization's IRS Form 990, 990-EZ, or 990-PF. IRS Form 990-N is not accepted.[1]
Extensions
Extension is granted in two three-month time periods.[1]
Fee
There is no fee to submit the financial report.[1]
Recent news
This section links to a Google news search for the term "South + Carolina + 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 1.9 Fishman, S. & Barrett, R. (2012). Nonprofit Fundraising Registration: The 50 State Guide. NOLO.
- ↑ "Multistate Filing Form," accessed December 17, 2014
- ↑ 3.0 3.1 South Carolina Secretary of State, "Public Charities," accessed February 16, 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
