The life of a nonprofit hinges on its ability to collect donations. In Florida, most nonprofits are subject to specific reporting and filing requirements. Further, additional reporting and tax implications come into play if the organization has been deemed exempt from federal income taxes. Knowing which organizations are subject to the reporting laws, as well as understanding what activities constitute solicitation, will help ensure the success of your nonprofit.
In Florida, nonprofit organizations are subject to the Florida Solicitations of Contributions Act. This law was passed to shield the public from deception and fraud in the solicitation and reporting of charitable contributions. The act applies to organizations that pursue a benevolent, scientific or philanthropic purpose. It is important to note that the law does not require that the nonprofit be a federally exempt 501(c)(3) organization.
Certain charitable organizations are not subject to the act. These include religious institutions, educational institutions and state or other governmental agencies. In addition, the act only covers solicitation of contributions, which is defined as a request for money or assets. Requests can be in writing or made verbally and may include activities as circulating flyers and making announcements to the press. However, the definition of solicitation does not include requests made to any organizations having 503(c)(3) tax exempt status or the government. For example, applications for a grant from a state agency would not be considered solicitation under the act.
Organizations that fall under the act and are soliciting donations are required to file an annual Solicitations of Contributions Registration Statement with the Florida Department of Agriculture and Consumer Services. The statement must include the name and contact information of the organization as well as details regarding fundraising methods and a budget. The form needs to be mailed to Consumer Services Office in Tallahassee, along with an appropriate filing fee. Your organization is responsible for maintaining records of all covered contributions for three years.
Additional reporting requirements apply to nonprofits that have been granted 501(c)(3) status from the Internal Revenue Service. This status allows a qualifying organization to opt out of paying federal income taxes, but is limited to nonprofits with a charitable, religious, educational, scientific, and literary purpose. Tax exempt organizations must report fundraising revenue on Form 990, and file it once a year. Any income that was raised outside of the exempt purpose is deemed "unrelated business income," and your nonprofit must pay taxes on it. This might include charging the public for use of a church basement to hold nonreligious meetings. The unrelated income would be reported on form 990-T.