Most houses of worship (churches, synagogues, mosques and temples) may legally solicit charitable donations without registering pursuant to state charitable solicitation acts. Most states either do not require registration or provide an exemption from charitable registration for houses of worship. However, it is important for these houses of worship to be aware of exceptions to these exemptions, which often result in the need for filing initial and renewal charitable registration filings in up to 15 states.
Many religious organizations, which includes houses of worship, mistakenly believe that they are exempt from registration in all states, but this is frequently not the case. Also, in addition to houses of worship, many states exempt charities formed and dedicated to religious purposes, especially if they are controlled or operated by houses of worship.
Unfortunately, the definition of a religious organization is different in every state, and sometimes it is not clear if an organization with a religious purpose is exempt from charitable registration.
These are the most important things to consider for houses of worship and other religious organizations fundraising in multiple states.
States Where Registration Is Not Required
Nine states do not have a charitable registration statute requiring registration by charitable nonprofits (DE, ID, IN, IA, MT, NE, SD, VT and WY), and two states have a limited scope (AZ and TX) and are not applicable to religious organizations or houses of worship.
Charitable Registration Exemptions for Houses of Worship
Frequently, houses of worship, and sometimes their integrated auxiliaries, conventions, or associations, are exempt from charitable solicitation registration in every state. However, if they are required to file a Form 990 with the IRS, then they are no longer exempt and must register to solicit in 15 states (AK, CO, GA, HI, MI, MN, MS, NH, ND, SC, TN, UT, VA, WV and WI). Also, houses of worship that use the services of professional fundraisers are required to register in Maryland.
An exemption application is required in up to ten states for houses of worship (AL, AR, CT, DC, HI, IL, MI, MN, NV and UT), but is sometimes only required by six states, because of the 990-registration exception in HI, MI and MN. Also, two states (MD and MO) require a written exemption request.
Exemptions for Religious Organizations
In addition to houses of worship, many states broaden their definition of a religious organization to also include charities primarily formed for religious purposes. Unlike houses of worship, these religious organizations must register in more states (up to 20 states): AK, CO, DC, FL, GA, HI, MA, MI, MN, MS, NH, ND, PA, SC, TN, UT, VA, WA, WV & WI), 15 of which require registration if the organization is required to file a Form 990 with the IRS (see above). For religious organizations, excluding houses of worship, that are not required to file the 990 with the IRS, state charitable solicitation statutes should be carefully reviewed for all states.
Charities organized for religious purposes (that are required to file a 990 with the IRS), may be exempt in up to 21 states (AL, AR, CA, CT, DC, IL, KS, KY, LA, ME, MD, MO, NV, NJ, NM, NY, NC, OH, OK, OR and RI), six of which require the filing of an exemption application (AL, AR, CT, DC, IL and NV), and two states (MD and MO) require a written request for exemption. Also, NY and OH have optional exemption applications that can be filed. Again, if an organization uses the services of a professional fundraiser, an exemption is no longer applicable in MD.
Download our FREE chart of religious organization exemptions, which details how each state defines religious organizations, what exemptions are available and what needs to be filed to obtain the exemption.
Want to simplify the process of determining your organization's state requirements? 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.