Most charities are reputable organizations that do their best to make good use of your charitable donations. Unfortunately, some charities and their paid fundraisers, are not. The following is designed to answer common questions and provide information to assist you with personal giving decisions.
Know the Charity Before You Give
It is important to research the charity before you make a contribution. If you are asked to make a -- either in person, by phone, or by mail -- ask questions!
- Who is making the request; a charity or a commercial fundraiser?
- Is the charity or fundraiser registered with the Secretary of State as required by law?
- What is the name, address, and telephone number of the organization asking for the donation?
- Exactly how will the donation be used?
- What percentage of the contribution will actually be spent on the charitable purpose of the organization? (In some instances, less than 20 percent of the money collected will be applied to a charitable cause.)
What is a "Charitable Organization?"
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?
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.
What is the difference between a Charitable Organization and 501c3 status?
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.
Who must register?
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.
Are grants considered solicitations of the general public?
The Charities rules specify an application or request for a grant from a foundation or similar entity which has an established application and review procedure is not considered a solicitation of the general public.
Who is not required to register?
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:
- Strictly volunteer run and raising less than $50,000 from the public; 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.
Do all states require a registration?
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.
Why is registration required?
The information is available to the public so any potential donor 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.
What is a Commercial Fundraiser or Professional Fundraiser?
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.
How can I tell if it is legitimate?
Registration with the Secretary of State does not address an organization's "legitimacy." The Charities Program will be able to confirm if an organization has met the state registration requirements. If the organization has properly registered, the program will be able to supply general and financial information as provided in the organization's registration documents. The information available from our office, combined with other available resources, is intended to assist the public in making informed decisions, before making a contribution.
How can I check out a Charity?
You may contact the Charities Program by calling our toll-free number 1-800-332-4483. Local or out-of-state callers may call (360) 725-0378. The program also offers an online search of registered charities and fundraisers. Other resources include your local Better Business Bureau, including several Internet sites that have been established to aid in your research of charitable organizations.
How can I check out a commercial fundraiser?
Commercial Fundraisers are also required to register annually with the Charities Program. Consumers may contact the Charities Program by calling the toll-free number 1-800-332-4483. Local or out-of-state callers may call (360) 725-0378. The program also offers an online search of the Charities Database. General and financial information is available and will assist potential donors in understanding how their contribution will be used, before committing to a donation.
The Charities Program also publishes the "Commercial Fundraiser Activity Report" each year near the holiday season, when charitable solicitations are at their peak. The report provides valuable information regarding how funds are distributed by commercial fundraisers to their charity clients. The report may be accessed here.
What percentage of funds actually spent on the organization’s charitable purpose is considered an “acceptable” percentage?
The Washington State Charitable Solicitations Act does not provide an "acceptable" or minimal percentage that must be used towards an organization's program service. Anyone involved in donating to charitable organizations should predetermine their own "minimum percentage standard."
Other Tips and Cautions
- Before you decide to donate, request printed materials about the charity.
- Contact the beneficiaries of the charitable funds to determine if they are aware of the solicitation and have authorized use of their name. Ask how the donations are used.
- Never give your credit card number to a telephone solicitor and don't pay by cash. Pay by check and make it payable to the charity, not the fundraiser.
- Don't be fooled by a name. Some organizations use sympathetic sounding names, or names that closely resemble those of respected, well-established charities.
- Don't give in to high-pressure "hardball" solicitations that demand an instant commitment. If the charity is legitimate, it should be willing to give you time to make up your mind.
- Be wary of charities that offer to send a courier to collect your money immediately.
- If a solicitor comes to your door, ask for identification and written material regarding the organization.
- Call the Charities Program, in Washington State, 1-800-332-GIVE to verify the charity or fundraiser is registered and get further information about the organization's financial and charitable activities.
Know the Law
Under the Charitable Solicitations Act, an individual soliciting a contribution MUST:
- Clearly state his or her name
- Clearly state the name of the charitable organization and its principal place of business
- Clearly state the name of the commercial fundraiser, if any, that employs the solicitor
- Disclose the true nature of the organization's relationship to the government, if it is associated with or has a name similar to a government organization
- Upon request, provide the published telephone number of Office of the Secretary of State Charities Program (1-800-332-4483)
An individual soliciting a contribution MUST NOT:
- Make a false, deceptive, or misleading statement
- State or imply that the contribution is tax deductible unless the charity has filed with the Secretary of State its letter from the Internal Revenue Service granting tax deductible status or otherwise qualifies for such status with the IRS
- Use the name "police", "sheriff", "firefighter" or similar name, unless authorized
- Harass, intimidate, or torment
- Claim that tickets to an event will be donated, unless the fundraiser has obtained a letter from those persons stating they will accept the tickets and the number they will accept
- Call before 8:00 a.m. or after 9:00 p.m. (your time).
If the required disclosures above are not provided - ASK! Take the time to seek the information that is required, and any additional information that may be important to you, and/or will help in your decision making process. The organization has contacted you, asking you to donate your hard-earned money. You will learn a lot about the organization simply by how they respond to your questions. An organization should be more than willing to take the time to answer your questions. Take notes and follow up by utilizing the many resources available to verify the information they have provided.
To File A Complaint
If you feel a charity or commercial fundraiser is operating in a deceptive or illegal manner, contact the Consumer and Business Fair Practice Division of the State Attorney General's Office at 1-800-551-4636 (TDD: 1-800-276-9883). You may visit the Attorney General's website and file a formal complaint online at http://www.atg.wa.gov/fileacomplaint.aspx.