MISSOURI FUNDRAISING REGISTRATION AND REGULATION Armstrong Teasdale LLP Sherry Doctorian and Mark Stahlhuth

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1 Last Updated: April 2013 MISSOURI FUNDRAISING REGISTRATION AND REGULATION Armstrong Teasdale LLP Sherry Doctorian and Mark Stahlhuth Table of Contents 1. Overview 2. Missouri Charitable Organization and Solicitations Laws 3. Resources 1. Overview To protect residents, legitimate charitable organizations and the charitable community, most states have laws requiring 501(c)(3) charitable organizations that solicit contributions from the public, including those in the social sector, to register and file periodic reports. The states that do not regulate these organizations are: Vermont, Indiana, Iowa, South Dakota, Nebraska, Texas (with limited exceptions),wyoming, Montana, Idaho and Nevada. Although specifics vary, the 40 states and the District of Columbia that regulate charitable fundraising generally require covered organizations to register with a state agency before soliciting the state s residents for contributions. Most of the state fundraising statutes exempt certain organizations from their registration and filing requirements. For example, in Pennsylvania, charitable organizations receiving annual contributions of $25,000 or less are exempt from the state registration requirements as long as they do not compensate anyone to conduct solicitations. In addition bona fide religious organizations, hospitals, educational institutions, and numerous other types of organizations are exempt from the Pennsylvania law. The information that must be submitted in or attached to the state registration forms varies from state to state. Many states accept a copy of IRS Form 990 in place of some or all of the required financial reports. In addition, other documents, such as articles of incorporation, charitable organization purpose and bylaws, typically are required to be submitted. All information submitted in the registration reports is generally made available to the public. In addition to registration, the states that regulate charitable fundraising generally require covered organizations to file periodic financial reports. In Pennsylvania, for example, covered organizations are required each year to file reviewed or audited financial statements

2 if their gross contributions are between $100,000 and $300,000 per year and audited financial statements if their gross contributions exceed $300,000 per year. To determine specific registration and filing requirements, social sector charitable organizations that are engaged in or about to engage in fundraising should consult these guides, experienced counsel and the agencies in the states in which the organization expects to be doing business. Doing business in a particular state may include any of the following: (1) soliciting contributions by mail, phone or otherwise from individuals, businesses or other charities located in the state; (2) conducting mission-based programs; (3) employing individuals; (4) maintaining a checking account; or (5) owning or renting property. In some states, local governments or municipalities may also require organizations soliciting charitable contributions to register and file periodic reports. These local regulations are beyond the scope of these guides. Many states, including some that do not require charities to register and report, regulate fundraising activity by professional solicitors and fundraising counsel. These regulations are also beyond the scope of these guides. a. Unified Registration Statement The Unified Registration Statement (URS) is an alternative to filing separate registration forms in cases where covered charitable organizations are soliciting contributions in multiple states. Thus, the URS proves most useful to nonprofits soliciting regionally or nationally and, therefore, subject to the registration laws of multiple states. The form is an ongoing project of the National Association of Attorneys General (NAAG) and the National Association of State Charities Officials (NASCO) in collaboration with the Multi-State Filer Project, Inc. (MFP). All states that require covered charitable organizations to register will accept the URS in lieu of their own registration form except for the states of Colorado, Florida and Oklahoma. The states that accept the URS form, however, continue to require annual filing of financial information or some other type of financial report. In addition, the following states also require the filing of supplemental forms and/or information in addition to the URS: Arkansas, California, District of Columbia, Georgia, Maine, Minnesota, Mississippi, Missouri, New Hampshire, North Carolina, North Dakota, Rhode Island, Tennessee, Utah, Washington, West Virginia and Wisconsin. The most recent version of the URS is version 4.01 released in May of The URS can be downloaded by following the instructions at This - 2

3 website contains helpful information about registration requirements and an up-to-date list of the states that accept the URS and those that do not. b. Fundraising Via the Internet and the Charleston Principles Most of the state statutes that require registration literally apply to internet solicitations that reach residents of the state. However, minimum contacts with the state and the practicality of applying these statutes to activities beyond more traditional fundraising techniques (e.g., telephone, direct mail, in-person solicitations) raise a number of issues that have troubled and perplexed state charity officials. Therefore, the National Association of Attorneys General/National Association of State Charity Officials have published the Charleston Principles that provide guidelines to states as to when internet solicitations by otherwise covered charities should be required to register. The Charleston Principles are guidelines only; they are not binding on the states and may change as laws change. Missouri looks to the Charleston Principles for guidance, but considers only Missouri law to be controlling. Under the Charleston Principles, a charitable organization that has its principal place of business in the state (and is thus domiciled in the state) and uses the internet to solicit contributions in that state must register in that state. If the organization is not domiciled in a state, it still must register if it (1) specifically targets persons in the state or receives contributions from persons in the state on a repeated and ongoing or substantial basis through or in response to website solicitations or (2) its non-internet activities alone would require registration in the state (e.g., direct mail or telephone solicitation into the state). The foregoing is a summary only. For more information on the Charleston Principles, including a complete copy with annotations, see It is strongly recommended that social sector charitable organizations intending to solicit contributions via the internet should seek the advice of experienced counsel concerning registration under one or more of the state fundraising laws. c. Prohibited Conduct Most states have statutes that prohibit a variety of false, misleading, unfair and/or deceptive practices in connection with charitable fundraising. For example, states typically prohibit organizations from making statements that funds are being solicited for a charity or will be used for charitable purposes when such is not the case. These statutes authorize state attorneys general to prosecute violations and courts may impose monetary fines and in some cases criminal penalties. - 3

4 2. Missouri Charitable Organization and Solicitation Laws a. General The Missouri Charitable Organizations and Solicitations Law, Mo. Rev. Stat regulates fundraising in Missouri. Unless exempted from registration under the statute, a charity must register with the Missouri Attorney General s office, and file annual reports to be allowed to solicit charitable contributions in the state. b. Exceptions from Registration and Report Requirements There are six categories of exceptions under the statute: (1) Religious organizations; (2) Educational institutions and their authorized and related foundations; (3) Fraternal, benevolent, social, educational, alumni, and historical organizations, and any auxiliaries associated with any of such organizations, when solicitation of contributions is confined to the membership of such organizations or auxiliaries; (4) Hospitals and auxiliaries of hospitals, provided all fundraising activities and solicitations of contributions are carried on by employees of the hospital or members of the auxiliary and not by any professional fundraiser who is employed as an independent contractor; (5) Any solicitation for funds governed by Chapter 130, RSMo, (Campaign Finance Disclosure Law); and (6) Any organization that has obtained an exemption from the payment of federal income taxes as provided in section 501(c)(3), 501(c)(7) or 501(c)(8) of Title 26, USC, as amended, if, in fact, no part of the net earnings of the organization inure to the benefit of any private party or individual associated with such organization. It is strongly recommended that charitable organizations contact an attorney to determine whether the organization fits within a category of exception. c. Registration of Documents & Public Inspection Exception In Missouri, the attorney general establishes and maintains a register (open to public inspection) of all documents filed by a charitable organization. However, the attorney general may withhold from the public documents or information obtained in the course of an investigation. d. Registration and Reports Requirements for Charitable Organizations A charitable organization may not solicit funds in Missouri, nor employ a professional fundraiser, for any charitable purpose, unless it has filed an initial registration with the office of the attorney general. All initial registrations must also include $15.00 for the filing fee unless the attorney general establishes a different filing fee. - 4

5 A charitable organization in Missouri must file an annual report with the attorney general s office. The annual report should follow the guidelines set forth by the attorney general and include $15.00 for the filing fee. This annual report must be submitted within 75 days of the close of each of its fiscal year. The close of the fiscal year is the same date of which the charitable organization filed its initial registration with the attorney general. e. Exceptions from Annual Reporting Requirements The following organizations are exempt from the annual reporting requirements: (1) Any charitable organization which receives an allocation of money from an incorporated community chest or united fund, provided such community chest or united fund is complying with all provisions relating to the filing of registrations, amendments to registrations and annual reports; (2) Any charitable organization which does not actually raise or receive contributions in cash, goods or services valued in excess of the dollar amount established by the attorney general, which shall not be less than $10,000, during the 12-month period immediately preceding the date on which its annual report would otherwise be due; or (3) Any charitable organization which is a local affiliate of a statewide or national charitable organization if all local fundraising expenses are paid by the statewide or national organization and the statewide or national organization files the annual report required. It is strongly recommended that charitable organizations contact an attorney to determine whether the organization fits within a category of exception. f. General Initial Registration Requirements The Missouri Attorney General accepts registrations on the URS form, though the forms found on the Missouri Attorney General website ( ) are generally preferred. Instructions and required forms to be filled out are also located on the Missouri Check a Charity Website ( The Missouri Attorney General requires applicants to respond to all questions, and if the question is not applicable, the applicant must specify the reason. g. Initial Registration Requirements for Charitable Organizations and Professional Fundraisers Charitable Organizations are required to provide information regarding the following: (1) Official name, principal place of business, address and phone number for each place of solicitation in Missouri and the purpose of the charitable organization; (2) Type of business entity (e.g. corporation, partnership, sole proprietorship) and the names and addresses of the officers, members and/or agents for the applicable entity; (3) - 5

6 Professional fundraiser information; (4) Solicitation information; and (5) Information required for a background check. h. Filing Fees Filing fees must be submitted with the initial registration as well as with the annual reports, or the registrations or reports will not be considered complete. The initial registration filing fee is $15. The annual report filing fee is $15. Professional fundraiser initial registration fees and renewal applications are each $50. Money orders, cashier s checks or personal checks for the required amount should be made payable to Merchandising Practices Revolving Fund. Forms and checks should be mailed to: Missouri Attorney General s Office Attention: Rhonda Johnson P.O. Box 899 Jefferson City, MO Registration is effective once you have been notified that the forms and checks have been received, in their proper form, by the Missouri Attorney General. If you have any questions, contact registration specialist Rhonda Johnson at (573) i. What is a Charitable Organization? A Charitable Organization can be any person (or entity) who does business in Missouri or holds property in Missouri for any charitable purpose and who engages in the activity of soliciting funds or donations for any fraternal, benevolent, social, educational, alumni, historical or other charitable purpose. j. What Constitutes a Charitable Purpose? A charitable purpose is any purpose which promotes directly or indirectly, the well-being of the public at large. k. What Constitutes Solicitation? Solicitation is any request, either oral or written, to seek or plead for funds, property, financial assistance or other thing of value, including the promise or grant of any money or property of any kind or value for a charitable purpose. This excludes (1) direct grants or allocation of funds received or solicited from any affiliated fundraising organization by a member agency and (2) unsolicited contributions received from any individual donor, foundation, trust, governmental agency or other source, unless the contributions are received in conjunction with a solicitation drive. - 6

7 l. Who is Classified as a Professional Fundraiser? A professional fundraiser can be any person (or entity) who is retained under contract or otherwise compensated by or on behalf of a charitable organization primarily for the purpose of soliciting funds. The term professional fundraiser does not include any bona fide employee of a charitable organization who receives regular compensation and is not primarily employed for the purpose of soliciting funds. 3. Resources Annual Survey of State Laws Regulating Charitable Solicitations as of January 1, 2012, Laws-Regulating-Charitable-Solicitations-as-of-January P50.aspx National Association of State Charity Officials, Multistate Filing, The Unified Registration Statement, Internal Revenue Service The Chronicle of Philanthropy, Philanthropy this Week, Missouri Attorney General s Office, Charitable Organization Forms Missouri Attorney General s Office, Check a Charity, - 7