Friday, April 20, 2012
Charity Registration Requirements in Missouri - Corrected
This is a correction to my Feburary 17, 2010 post about charity registration requirements in Missouri that you no-doubt read and put to memory. In it, I summarized my interpretation of the registration requirements for charities in Missouri as spelled out here. At first glance, they seemed really straightforward, but the kind folks at the Missouri AG's office read that blog post and regretfully informed me that I gave Missouri too much credit. Turns out, charity registration requirements in Missouri are not that simple.
First, professional fundraisers (people who make a living fundraising for nonprofit organizations) are required to register. But that definition does not include employees of a charity who are not primarily employed by the organization for the purpose of soliciting funds. As anyone who has ever worked for a charity can tell you, there are times when the whole staff must participate in fundraising or risk not eating the next week. But unless it's an employee's primary job, s/he does not have to register with the State of Missouri.
Second, the requirement that all charities must register has several exemptions:
1. Any organization exempt from paying federal income taxes by the IRS under sections 501(c)(3), (c)(7), or (c)(8) of the Internal Revenue Code so long as no part of the organization's net earnings inure to the benefit of any private party or individual associated with such organization.
2. Religous organizations
3. Educational institutions and their associated foundations
4. Fraternal, benevolent, social, educational, alumni, and historical organizations, and any auxiliaries associated with any of such organizations when solicition of contributions is confined to the membership of such organizations or auxiliaries.
5. Hospitals and auxiliaries of hospitals, provided all fundraising activities and solicitations are carried on by employees of the hospital or members of the auxiliary and not by professional fundraisers.
The above exemptions make sense for many of reasons, among them that they don't put an undo burden on organizations (like food kitchens, animal shelters, etc.) more concerned with delivering their programs than filling out government paperwork. Of interesting note, at least to me, is that the exemptions to the registration requirements cover nearly all of the organizations that would be subject to review under the BBB's Charity Accountability Standards. Where the state rightfully steps out, the BBB - a nonprofit organization itself - steps in to help donors find solid organizations in need of their support.
So, here you go, Missouri. Your charity registration requirements are not so simple after all.