The Good, the Bad and the Ugly
If your organization is soliciting charitable donations in the District of Columbia and is thinking about filing for a charitable solicitation license, be forewarned that you’ll likely need a fistful of dollars and the patience of Job; that is if you want to attempt to do this on your own. You’ll also likely be delayed by months if you attempt any of this process via mail, and don’t even think of trying in-person filings, as many DC government offices are closed to the public during the pandemic.
For charities and other nonprofits soliciting in Washington, D.C. (including applications for federal grants), unless exempt by statute, a charitable business license from the D.C. Department of Consumer and Regulatory Affairs (“DCRA”) is needed. The online form used for this purpose is ironically named the BBL-EZ, with BBL standing for “Basic Business License” and EZ allegedly standing for “Easy”. This is surely a misnomer, because there is nothing basic or easy about obtaining a charitable solicitation license in Washington, D.C.
THE GOOD: Help with Obtaining an Elusive License
The good news is that you found this article, which provides helpful information on the common problems and errors that cause delays when trying to obtain a charitable solicitation license in D.C. By being aware, you can hopefully save yourself time and aggravation when you need to file for a charitable solicitation license.
THE BAD: Beware of Incorrect Guidelines and Websites
The bad news, unfortunately, is that some online instructions and other resources relating to charitable registration in D.C. are inaccurate and misleading, including the guidelines created by the Multi-State Filer Project (“MSFP”), the organization that created the Unified Registration Statement (“URS”). Below are just a few of the inaccuracies in the URS guidelines for D.C.:
|BBL fee is $303||It's actually $412.50|
|Mail filing to 941 N. Capitol St., NW||Currently online filing is the only option for the BBL-EZ, and other required filings should be submitted online|
|URS is required||D.C. does not require the URS|
|Period covered: 1 year||Nope... it's 2 years|
|Renewal date 9/1||Renewal is due biennially before license expires|
|Notarized signatures required||Most of the filings required can be submitted online with a digital signature…a notarized signature is required only for the Charitable Services Business Worksheet|
|IRS Form 990 is required||No, it isn't|
As for required financial reporting requirements for D.C. registration, nearly all of the information in the financial reporting section of the URS guidelines is inaccurate. In addition to this and the above inaccuracies, the URS guidelines only briefly touch on the additional documents required and filing requirements in D.C., by alluding to “a host of local licensure requirements.” I’ll discuss this more fully in the next section.
To be fair to the MSFP though, I should note that their guidelines were likely obtained some time ago from various DCRA web pages. Those pages, which have long since been updated, were also riddled with errors.
AND THE UGLY: Required Prerequisites for Filing DC BBL-EZ
Before attempting to file the BBL-EZ with the Business License Division of the DCRA, you’ll need to first take care of some prerequisites. There are several documents that are required in support of the BBL-EZ and organizations located outside of D.C., who are not otherwise exempt, must first qualify to conduct business in D.C. and obtain a tax exemption from the D.C. Office of Tax and Revenue (“OTR”).
The BBL-EZ requires the following documents in support of the application:
• Certificate of Occupancy, or information therein
• Registered Agent Written Consent
• Clean Hands Self Certification (a sworn statement that no outstanding debts are owed to D.C.)
• Charitable Services Business Worksheet that certifies person authorized to file BBL-EZ on behalf of the nonprofit
For organizations located outside of D.C., the filing of a Foreign Registration Statement (Form FN-1) is required at the Corporations Division of DCRA. This form or online filing (recommended) requires the naming of a registered agent in D.C. and an original Certificate of Good Standing (Certificate of Existence) from the registration authority in the state/country of incorporation that is not over 90 days old.
In addition to the above corporate filing, D.C.’s tax authority (OTR) requires the filing of an Application for Exemption (Form FR-164), along with an IRS Determination Letter or a copy of the filed IRS Form 1023 or Form 1024 (Application for Recognition of Exemption). OTR also requires the filing of a Combined Business Tax Registration Application (Form FR-500). Fortunately, both of these are required to be filed online.
I know what you're thinking. Did he fire off six documents or only five? Well to tell you the truth in all this excitement I've kind of lost track myself. But since this is the most difficult filing jurisdiction for nonprofits, with the most onerous charitable registration requirements in the U.S., you've got to ask yourself one question: “Do I feel lucky?” Well, do ya?!?
For a Few Dollars More, Outsourcing Can Save You Time and Headaches
Given the complexity of the filing process in D.C., many find it to be much more efficient and worth the additional expense of enlisting the assistance of an attorney, accountant or knowledgeable service company. These professionals can assist you in navigating the regulatory gauntlet surrounding the charitable registration licensing process in D.C.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.