Nonprofit regulation in Utah
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Nonprofit regulation in Utah involves a complex set of rules that govern nonprofit organizations and charitable giving throughout the state. Major issues surrounding nonprofit regulation nationwide include the following:
- contribution limits,
- donor disclosure, and
- the redefinition of issue advocacy.
Utah is one of 39 states that require charitable organizations, and those intending to solicit on their behalf, to register with the state in order to solicit contributions, whether they are a Utah organization or based out-of-state. In Utah a number of groups and organizations are exempt from registration. Exemptions are not automatic; organizations must formally file to be exempt.[1]
Utah is one of 32 states that allows registrants to use either the Unified Registration Statement (URS) or the state registration form.[2] Only seven states requiring registration do not accept the URS.
- Note: The following is not a how-to guide in managing an organization's registration and reporting requirements, but rather an attempt to share information about the relative degree of regulation governing nonprofit charitable activity at the individual state level. The information on this page was last updated in early 2015.
Background
IRS building in Washington, D.C.
According to the Foundation Center, there are over 1.5 million nonprofit organizations in the United States.[5] Section 501 of the U.S. tax code outlines which types of nonprofit organizations may be granted tax exempt status by the Internal Revenue Service. The section of this code that provides for exemption is section 501(a), which states that organizations are exempt from some federal income taxes if they fall under sections 501(c) or 501(d), or under section 401(a).[6]
Organizations classified as 501(c)(3) are nonprofit charitable, religious and educational organizations. These include organizations like the Red Cross and Habitat for Humanity as well as the American Civil Liberties Union and the Lucy Burns Institute, which provide, as defined in the federal code, “instruction of the public on subjects useful to the individual and beneficial to the community.”[7] Organizations granted 501(c)(4) status are political education organizations, and can engage in political lobbying. This includes donations to political committees that support or oppose ballot measures, bond issues, recalls or referenda. 501(c)(4) organizations can thus engage in issue advocacy, but they are not allowed to expressly advocate for the election or defeat of a particular candidate.
While the Internal Revenue Service designates eligible nonprofit charitable organizations with a federal tax exempt status, individual states require their own level of regulation and reporting, particularly when organizations attempt to solicit fundraising contributions. The amount of regulation required differs by state, as does the degree to which state regulations protect the privacy of individual donors. Three states, for instance, require annual copies of IRS Form 990 (schedule B), which lists individual contributors who contribute over a specified amount. Research shows that attempts to make contributions more transparent has an unintended negative effect on the number of contributors who give, as well as the amount.[4]
Governing agencies
The Utah Division of Consumer Protection is the agency in the state governing rules concerning donor solicitation and registration.
See law: [le.utah.gov/code/TITLE13/13_22.rtf Utah Code Annotated sections 13-22-1 through 13-22-23]
Registration requirements
Any nonprofit group or organization located in Utah, unless exempt, must register with the Utah Division of Consumer Protection. Any non-exempt nonprofit, in any state, intending to solicit in Utah must also register, along with anyone intending to solicit in Utah on behalf of a nonprofit. Non-exempt nonprofits might include traditional charitable organizations like the Red Cross or Habitat for Humanity, educational or policy organizations like the American Civil Liberties Union, or issue advocacy groups like the League of Conservation Voters.
Exemptions
A number of groups are exempt from registering in Utah. These groups must apply for exemption; it is not automatic.
The following groups are exempt from registering:[1]
- Religious groups
- Educational institutions
- Membership groups
- Appeals for named individuals
- Political groups, candidates, etc., as along such groups make clear that political parties or candidates are the beneficiaries of contributions
- Political action committees and funds related to candidates or ballot issues are exempt if required to file with the Federal Election Commission or state commission
- Broadcast media owned or operated by educational groups or governmental entities
- Television and radio stations that donate free airtime
- Volunteer fire, rescue and civil defense organizations
- Any state or federal agency
- Any congressional chartered corporation
Procedures
Nonprofits registering in Utah can use either the Unified Registration Statement (URS) form or the state form. If using URS, organizations must also provide a Supplement to Unified Registration Statement.[1]
Documents
The following documents are required along with your registration form:[1]
- Articles of incorporation
- Bylaws
- IRS determination letter
- Most recent IRS Form 990, if any
- Contracts with professional fundraisers
- If an organization doesn't have an IRS Form 990, it must complete a Statement of Functional Expenses form.
Signature and fee
One authorized person from the organization must sign; no notarization is required.
The fee to register is $100.[1]
Filing procedures
Registration materials must be mailed to:[1]
Division of Consumer Protection
160 East 300 South
P.O. Box 146704
Salt Lake City, UT 84114
Renewal
Registration expires each year and must be renewed by the earliest of either January 1, April 1, July 1, or October 1 after the end of an organization's first year. No extensions are granted but Utah accepts IRS Form 990 from the prior year as a substitute until current year information is updated and available, which should be filed within 30 days of being ready. The remainder of the process is the same as registration.[1]
Financial reporting
There are no additional financial reporting requirements beyond what is submitted in the renewal process.[1]
Recent news
This section links to a Google news search for the term "Utah + donor + privacy"
See also
External links
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Fishman, S. & Barrett, R. (2012). Nonprofit Fundraising Registration: The 50 State Guide. NOLO.
- ↑ "Multistate Filing Form," accessed December 17, 2014
- ↑ Guidestar, Fundraising: What Laws Apply?" accessed February 18, 2015
- ↑ 4.0 4.1 London School of Economics, "Campaign finance laws that make small donations public may lead to fewer people contributing and to smaller donations," January 7, 2015
- ↑ Foundation Center, "Frequently Asked Questions," accessed December 17, 2014
- ↑ Cornell University Law School, "26 U.S. Code § 501 - Exemption from tax on corporations, certain trusts, etc," accessed January 13, 2015
- ↑ Cornell University Law School, "26 CFR 1.501(c)(3)-1 - Organizations organized and operated for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals," accessed January 13, 2014
