In most states, educational institutions like colleges, universities and other primary and post-secondary organizations are exempt from state charitable solicitation registration and nonprofit annual report requirements.
Unfortunately, it can be quite challenging to determine which states allow those exemptions.
For those states that do, it can be difficult finding out how to obtain an exemption, especially since there are conditions or exceptions that can negate an otherwise available exemption for an educational institution.
State-by-State Requirements for Educational Institutions
There are nine states where there are generally no exemptions to charitable solicitation registration for educational institutions. Not only is registration required in the following states, but annual compliance or annual/biennial renewal filing is also required:
Some form of exemption exists in 29 states, but the method to obtain the exemption can vary. The following 11 states require submission of a charitable solicitation registration exemption form, online filing or exemption letter:
In the remaining 18 states not listed, no filing is required to obtain an exemption but in up to 16 of those states, sending a letter placing the state on notice that the educational institution considers itself exempt is advisable. Optional exemption applications may be filed in Louisiana, New York, North Carolina and Ohio.
In general, the following nine states* do not have a charitable solicitation act that requires registration or exemption is not applicable for educational institutions:
*Registration or exemption is also not applicable in Arizona and Texas for educational institutions. While these states do have charitable solicitation registration requirements, they are very narrow in application and don’t apply to educational institutions.
A Few Other Factors to Consider
As evidenced above, state charitable registration and exemption requirements can be challenging to navigate. Unfortunately, these requirements can be further complicated by other factors like state accreditation requirements and engaging professional fundraisers.
About half of the states that broadly require charitable solicitation registration also require that an educational institution be accredited by a state, regional or national accrediting agency or association in order to receive an exemption from registration. Educational institutions that are not accredited will not be able to file for an exemption.
In some states like Maryland, Michigan, New York and Ohio, an educational institution that solicits charitable donations may be exempt from charitable registration but only if it does not engage a professional solicitor and its solicitation is confined to groups like students, former students, parents of a student or former student, present or former board members and staff members of an accredited school, college or university. Solicitation outside of these groups may negate an exemption.
South Carolina has similar limitations. If an exemption from charitable solicitation registration is desired in South Carolina, two conditions must be met. First, fundraising activities cannot be conducted by professional solicitors, professional fundraising counsel or commercial co-venturers. Second, solicitation should be confined to students and their families, alumni, faculty, friends and other constituencies, trustees, corporations, foundations and individuals who are interested in and supportive of the programs of the institution. (Even if an exemption is applicable, remember that South Carolina requires an exemption filing and annual renewal.)
Careful Review of Each State’s Requirements is Critical
As you can see from the state-by-state requirements, exceptions and other unique conditions, fundraising for educational institutions requires careful attention to the specific state charitable solicitation registration and exemption requirements. When your organization is soliciting in multiple states, it can be worthwhile to engage professional assistance for navigating these registration and exemption filing processes.
Want to simplify the process of determining state requirements for your educational institution? COGENCY GLOBAL's Charitable Registrations and Exemptions Wizard (CREW) can help.
This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.