Non-Profit Fundraising in the State of Florida

By Wayne Thomas

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.

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.

Florida Law

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.

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Exceptions

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.

Filing Requirements

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.

501(c)(3) Status

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.

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Non-Profit Organizations & Disclosure Laws

References

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Non-Profit C4 Vs. C3

Title 26, Section 501(c) of the Internal Revenue Code recognizes several different types of nonprofit organizations. Nonprofit corporations, trusts and foundations have several advantages over for-profit organizations, including an exemption from paying federal income taxes. Two classes of 501(c) nonprofits, known as “C3” and “C4” organizations, are similar in some respects. However, they have different eligibility requirements, and the IRS places different restrictions on their activities and donations. When deciding whether to structure your nonprofit as a C3 or a C4, these distinctions should be considered.

How to Find 501(C)(3) Tax Exempt Companies

To obtain a 501(c)(3) tax exempt status, most nonprofit companies must file documents with the IRS proving they operate for certain charitable purposes specified by statute. Internal Revenue Code 501(c)(3) includes groups whose purposes are charitable, educational, religious, scientific, literary or supporting national or international amateur sports competitions, the prevention of cruelty to children or animals, and testing that applies to public safety. Contributions to 501(c)(3) organizations, with the exception of those that test for public safety, are deductible as charitable donations for federal income tax purposes. With the help of a number of federal and state government websites, as well as private websites, there are several ways to verify the exempt status of a nonprofit.

State Statute of Florida on Raffles & Charities

Fundraising is critical to the success of charities and other nonprofits. Games of chance, such as lotteries and raffles, can be an easy way to entice potential donors by offering the prospect of winning a prize. However, most lotteries and raffles are considered gambling and are illegal in Florida. But, the state has carved out an exception for qualifying nonprofits, provided specific rules are followed and no fees are required to participate. Even with this exception, however, nonprofit organizations must still comply with all state and federal laws governing the solicitation of funds.

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