What this is: Refer to this guide to help you determine whether using the Unified Registration Statement (URS) is right for your nonprofit.
What this means: The URS is still a very useful, time-saving tool when registering or renewing to solicit. However, for charities new to the filing requirements, use of the URS will likely lead to possible late fees and multiple state rejections.
Nonprofits that are new to charitable solicitation registration frequently ask me about the Unified Registration Statement (URS), and whether it is a good form to use for nationwide registration and renewal filings. I tell them that the URS can be a timesaver and that the nonprofit team here at Cogency Global Inc. sparingly uses the URS. It’s a single form accepted by many states for both initial and renewal charitable solicitation registration filings. I do, however, temper this endorsement with a warning: Do not use the URS if you are only filing in a handful of states, and inexperienced filers should not use the URS, unless they are very diligent about understanding and meeting all the filing requirements in each state.
Novice Filers Often Experience Rejection With URS
It’s not uncommon for novice filers to receive many rejections on multiple occasions from various states when using the URS. This is mostly due to the fact that the filing guidelines published with the URS are not up to date. In fact, it’s my understanding that the URS guidelines have not had a complete updating since 2010, even though the form and guidelines show an update date of 2014. This leads the user to believe that the content in the guidelines is more current than it actually is. The result is that filers who diligently follow the outdated guidelines will likely have most or all of their filings rejected by the states. This might be one of the reasons that some states either prefer to receive their own state form or have stopped accepting the URS in recent years. The rejections are a drain on state and charitable resources. We’d love to hear your comments…have you had any charitable registration or renewal filings rejected as a result of following the URS guidelines? Also, since the URS was created to meet the requirements of multiple states, it tends to require more information, state-specific supplemental forms and attachments than many state-specific forms. For charities that only need to register in a handful of states, the state online filling system (where available) or state forms might prove to be an easier option.
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When and Where to Not Use the URS
Do not use the URS in Georgia. Georgia requires several additional state forms to be filed with the URS, such that it doesn’t make sense to use the URS. Also, Georgia is notorious for rejecting URS filings repeatedly and holds filers of this form to a very high standard. Detailed and precise answers are required for all of the questions on the URS when filing in Georgia. This is not the case in most states, where a minimal amount of information will be accepted when answering the questions on the URS.
Consider not using the URS in certain circumstances. Other states have very simple registration and renewal forms, such as Alabama’s renewal filing, which only requires the name and registration number of the charity, along with a filing fee and annual financial report (usually a copy of the IRS Form 990). Similarly, most states will allow for online filings, which is sometimes easier and faster than filing the URS. Another consideration when deciding whether to use the URS is to keep in mind that less than half of the states do not accept the URS for renewal filings. Determining which states will accept the form is another time-consuming task and filing it with states that do not accept the URS will only lead to rejected filings, delayed registrations and renewals and possibly late fees and/or fines.
The URS...Then and Now
The creation of the URS in the late 1990s was hailed as a godsend for charities registering to solicit donations nationwide. The driving force behind it was the goal of uniformity in the state charitable solicitation registration and renewal filing requirements for nonprofits soliciting in multiple states or nationwide. Initially, the URS had great success, as 37 of the 40 states accepted the URS for initial charitable registrations soon after its release. Aside from the minor inconvenience of having to complete 3 state-specific forms for registrations instead of 40, a handful of states also required additional forms or supplements to be filed with the URS. This was required because the URS did not meet all of the statutory reporting requirements in every state. In addition, the states varied the fees and needed signatures when filing the URS. Thus, the URS is not entirely uniform, but aside from some minor differences among the states, the URS did add significant uniformity to what was once an extremely difficult registration and compliance task for charities fundraising nationwide. Turn the calendar forward more than 23 years to 2023, and is this still true?
The simple answer is that the URS is still a useful, time-saving tool when registering or renewing to solicit. However, for charities new to the filing requirements, use of the URS will likely lead to possible late fees and multiple state rejections, which in turn require a significant amount of time and effort in having to make multiple filing attempts. Furthermore, the filing landscape has changed dramatically since the URS was introduced. Only 22 states now allow nonprofits to use the URS when they register to fundraise and only 15 states accept it for renewal filings. Also, many states now require online filings and no longer accept the URS. Other states, tired of rejecting the URS, have since mandated the filing of state-specific forms. Charities that are new to the registration filing process should not use the URS, unless they are diligent with meeting the specific state requirements. Do not rely on the URS filing guidelines. An experienced attorney, CPA or service company is usually a much better solution and, for do-it-yourself filers, below are some helpful resources.
The National Association of State Charity Officials (NASCO) is an association of state offices charged with oversight of charitable organizations and charitable solicitation in the United States (see directory of state charity filing offices).
Nonprofit Fundraising Registration: Nolo’s 50-State Digital Guide (updated semi-annually – full disclosure: I am the co-author of this book – use code SAVE20 for a 20% off discount).
Here is an excerpt from Chapter 5: Registering your nonprofit to fundraise in multiple states is burdensome—no question about it. First, you need to figure out which states you have to register in. That alone is a difficult task—simply accepting donations through your website can trigger registration requirements in certain states. Once you figure out where you may have to register, you need to look at that state’s rules to see whether you fall within an exemption. Then, imagine having to fill out as many as 40 different registration applications. That could be a nightmare. Fortunately, there is an easier way: a unified registration form that can be used to register in multiple states. This chapter goes over this form—the Unified Registration Statement (URS)—and how to complete it, including line-by-line instructions.
Are there any exemptions applicable to commercial co-venturers (CCVs)?
Unlike the many exemptions afforded to certain types of charities from charitable solicitation registration (e.g. religious organizations, educational institutions, hospitals, etc.), there are very limited exemptions applicable to CCVs. The state of Washington statutorily exempts CCVs from filing, in 2013 Maine suspended most of the registration and reporting requirements for CCVs and there are other narrow exemptions that vary by state (e.g. a charity exempt from charitable registration in Massachusetts is also exempt from filing Form 10B – Addendum to Registration Statement to Be Filed by Commercial Co-Venturers). Read more about this at Charitable Sales Promotions: A Primer for Charities and Commercial Co-Venturers – Part 1.
Should charities be concerned about unrelated business income tax (UBIT)?
Another concern for charities engaged in charitable sales promotions is unrelated business income tax (“UBIT”). When charities engage, on a regular basis, in trade or business activities unrelated to their charitable purpose, there is the risk that they could lose their federal tax-exempt status. Though publicly acknowledging a CCV’s support and making a general reference to their business and products is allowed, promoting or “advertising” of the CCV’s products by the charity could jeopardize the charity’s tax exemption. You can learn more about this topic at Charitable Sales Promotions: A Primer for Charities and Commercial Co-Venturers – Part 2.
When is an audit for initial charitable registrations required?
There are 16 states that require an audit for initial charitable registrations, triggered by thresholds of revenue or contributions ranging from $300,000 to $2 million. In Illinois, for example, an audit is required if an organization receives $300,000 or more in charitable contributions while in Georgia, the exemption threshold is $1 million in revenue (excluding interest, dividends or income from the investment of charitable funds). Learn more at Audit Requirements for Nonprofit Charitable Solicitation Registration.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.