“Don't Ask Unless You Tell: Most Charities Need to Register Before Soliciting Contributions”
Most nonprofit organizations need charitable donations to survive and thrive.
Kimberly I. McCarthy
David J. Pellegrino
Jennifer Luzzi, 2014 PS&H Summer Associate, contributed to this article.
Most nonprofit organizations need charitable donations to survive and thrive. However, many organizations are unaware that Rhode Island requires them to register with the state prior to soliciting charitable contributions. Organizations that fail to register in advance face significant penalties, including an order prohibiting the nonprofit from future charitable solicitations, and administrative fines of up to $1,000 per violation.
“Solicitation” is defined very broadly. It includes direct or indirect requests for money, property, or other things of value, and requests made by any method, including mail, telephone, media outlets, social media, and the like. Moreover, charities are required to register even if their “solicitation” is not successful; regardless of whether any actual contribution is received, solicitation occurs when the request is made.
Several categories of organizations are exempt from registering, however, including but not limited to:
- People or organizations helping a specific individual
- Organizations which solicit only from their own membership (meaning members of the nonprofit corporation, not people on their mailing list)
- Certain religious organizations, education institutions, nonprofit or charitable hospitals and public libraries
- Veterans’ organizations
- Historical societies
Prior to soliciting charitable contributions in Rhode Island, a nonprofit organization must register with the State of Rhode Island Department of Business Regulation (the “DBR”), and must renew its registration annually. Registration forms, which must be submitted online or via CD-ROM, can be found at the DBR’s website at www.dbr.state.ri.us/divisions/charitable.
For more information, see www.dbr.state.ri.us/divisions/securities/charitable.php
, or contact Kimberly I. McCarthy
or David J. Pellegrino