The Flop, Turn and River…Some Background and Current Requirements
Nevada does not have a charitable solicitation statute, but its corporate law was amended to require charitable solicitation registration with the Nevada Secretary of State’s office by nonprofits before soliciting tax-deductible charitable contributions from a location within the state or solicitations from persons or corporations in Nevada. The new law was effective on October 1, 2015, but the state’s registration form, website and instructions, until recently, did not comply with the amended law or the actual requirements mandated by it. The form used to register a charity is the Charitable Solicitation Registration Statement.
For organizations not conducting business in the state, no other forms are required, and there is no filing fee. A charitable organization is “conducting business” in Nevada if it has an office in Nevada, or if its employees or agents regularly conduct business in Nevada (such as by delivering program services within the state). An organization is not conducting business when it only conducts fundraising from an out-of-state location by such remote means such as mail, email, telephone, television or other media. In addition, an organization is not doing business when it conducts a one-off fundraising event within the state or holds a meeting concerning organizational affairs within the state. For domestic Nevada corporations and nonprofits registered as foreign corporations in Nevada, the registration form is required in addition to other required annual corporate filings to maintain corporate good standing.
Nevada’s amended law no longer requires out-of-state (foreign) nonprofits to qualify to do business if they solicit contributions in Nevada and that is their only contact (nexus) with the state. Previously, out-of-state nonprofits were required to qualify to do business in Nevada if they solicited tax deductible donations from people located in the state. Prior to October 1, 2015, registration was more difficult for foreign nonprofits (i.e. not formed in Nevada), as they were required to qualify to conduct business as a foreign nonprofit corporation. This is no longer required. Also, Internal Revenue Code 501(c) nonprofit corporations were required to file a notarized Declaration of Eligibility for State Business License Exemption. This, too, is no longer required for organizations that limit their activities in the state to solicitation (i.e. do not conduct business in the state). See our previous blog post “Nevada Establishes Charitable Registration Requirement for Nonprofits.”
Not Much Room to Bluff…Exemptions Are Limited
The following nonprofits are exempt from filing the Charitable Solicitation Registration Statement in Nevada (for a complete list of exemptions, please see NRS 82A.210 Exemptions):
- Nonprofits whose requests for contributions, donations, gifts or the like which are directed only to a total of fewer than 15 persons annually;
- Nonprofits whose requests for contributions, donations, gifts or the like are directed only to persons who are related within the third degree of consanguinity or affinity (i.e. a child, parent, grandchild, sister, brother, grandparent, great-grandchild, niece, nephew, aunt, uncle, or grandparent) to the officers, directors, trustees or executive personnel of the corporation;
- Charitable organizations recognized as a church under the Internal Revenue Code section 501(c)(3) (this includes tax-exempt churches, mosques, synagogues, and temples; and integrated auxiliaries, conventions, or associations thereof);
- Appeals for funds to benefit a particular person or his/her immediate family named in the solicitation, but only if all the proceeds of the solicitation are given to or expended for the direct benefit of the person or his/her immediate family; or
- Alumni associations of an accredited educational institution (university, college or school) which solicits only persons who have an established affiliation with the institution, including, without limitation, current and former students, members of the faculty or staff, or persons who are within the third degree of consanguinity or affinity of such persons.
However, for organizations that qualify for an exemption, an annual application must be filed with the Secretary of State: Exemption from Charitable Solicitation Registration Statement. The form must be filed by any charitable organization that is exempt from federal income tax under §501(c)(3) of the Internal Revenue Code, that intends to solicit contributions in Nevada, and that claims exemption from the registration requirements in Chapter 7 of the Nevada Revised Statutes.
Rebuys Are Mandatory…Renewal Requirements
Unless exempt, all charitable organizations soliciting in Nevada must file a Charitable Solicitation Registration Statement each year, not later than the end of the anniversary month in which they first filed.
Time to Fold?…Consider Corporate Withdrawal
For organizations that registered to conduct business under the prior statutory requirements, if you are not conducting business in Nevada, then withdrawing your corporate registration is an option. Doing so will relieve your nonprofit of the need and related expenses to maintain a registered agent in Nevada and the filing of additional forms to maintain your corporate good standing.
Winner, Winner, Chicken Dinner… Summary of Requirements
Nevada’s amended corporate statute requires charitable solicitation registration by charitable nonprofits soliciting donations in the state. Few exemptions are available, and an exemption application is required annually for organizations that qualify for an exemption. Depending on your organization’s activities, incorporation or corporate qualification might be required, but if your activities are limited to solicitation, and you are not “conducting business” in Nevada, then only charitable registration is required annually.
For organizations already registered to do business in the state, corporate withdrawal is an option, thereby sparing your organization of some needless expenses and filings that are no longer required. Consider enlisting the assistance of a service company, which can be your “ace in the hole” for help with charitable registration, renewal, exemption or corporate withdrawal filings in Nevada and nationwide. Another recommended option is to take advantage of do-it-yourself resources to simplify the filing process.
Whether you seek assistance or handle it yourself, if your organization wants to go all in with fundraising plans for Nevada, your best bet is to ensure your charity is in compliance by making sure to file your charitable solicitation registration.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.