Charitable Organizations - Frequently Asked Questions
General Questions
- What is a "Charitable Organization?"
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A Charitable Organization is anyone asking or collecting contributions from the public, and claims it will be used to support a charitable activity. Charitable is broadly defined and includes activities such as educational, recreational, social, patriotic, legal defense, benevolent, or health causes.
- What is the difference between a Nonprofit Corporation and a Charitable Organization?
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A Nonprofit corporation is an entity recognized by the state of Washington when “Nonprofit Articles of Incorporation” are filed with the Corporations Division of the Secretary of State. A charitable organization is any individual or entity, (regardless of corporate status) that fundraises in Washington to support a charitable activity. It is not unusual that a nonprofit corporation is also engaged in charitable activities and subject to separate reporting requirements with the Corporations and Charities Program.
501c3 is a Federal tax exempt status granted by the Internal Revenue Service. Certain requirements established through the Internal Revenue Code must be met in order to receive tax exempt status. For specific information regarding the application process, please refer to the IRS Web site at www.IRS.gov or call the Exempt Organizations Division at (877) 829-5500.
- What is the difference between a Charitable Organization and 501c3 status?
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A charitable organization in Washington State is defined as any entity that solicits or collects contributions from the public, where the contribution is, or is said to be used to support a charitable activity. Charitable activity includes, but is not limited to, educational, recreational, social, patriotic, legal defense, benevolent, or health causes.
501c3 is a Federal tax exempt status granted by the Internal Revenue Service. Certain requirements established through the Internal Revenue Code must be met in order to receive tax exempt status. For specific information regarding the application process, please refer to the IRS Web site at www.IRS.gov or call the Exempt Organizations Division at (877) 829-5500.
- What is a Commercial Fundraiser or Professional Fundraiser?
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A commercial fundraiser is an independent, third party that in exchange for compensation, conducts fundraising activities for a charitable organization. It is not unusual for commercial fundraisers to be hired by and paid for their fundraising services by multiple charitable organizations.
- Who must register?
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In most cases, the law applies to almost every organization or individual that fundraises in Washington State in the name of charity. This includes organizations located outside the state of Washington that solicit Washington State residents. If an individual or organization raises funds in the name of charity, it is considered a "Charitable Organization" for purposes of this statute, even if you don't think of the entity as a charity.
- Do all states require a registration?
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Most states have some type of registration or filing process. It is necessary for organizations contemplating fundraising activities into other states to research the individual state's reporting requirements to ensure compliance before fundraising activities begin.
- Who is not required to register?
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While most charities must register, there are some activities exempt from the state registration requirements. In Washington State, any organization that is one of the following is not required to register:
- Charitable organizations raising less than $50,000 from the public, in any accounting year when all the activities, including fundraising, are carried out by persons who are unpaid for their services; or
- Entitled to receive tax exempt status from the Internal Revenue Service as a church; or
- Political Organizations
- Fundraising to benefit specific individual, but only if all proceeds is given to that individual.
Organizations exempt from registration requirements are encouraged to file an "Optional Registration” with the Charities Program. The Optional Registration allows the Office of the Secretary of State to respond to customer inquiries.
- Why is registration required?
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Registration information is available to the public so potential donors can learn more about how their contribution will be used by the organization conducting the fundraising campaign. The benefiting charities as well as the third party paid to solicit funds must, in most cases, register and provide general and financial information concerning their activities. Registration with the Office of the Secretary of State should not be represented as an endorsement.