The Colorado Secretary of State's office posted an announcement explaining changes to rules for the Colorado Charitable Solicitations Act. These changes took effect on October 1, 2018.
Information on the Law and 2018 Changes
Change to "Expired" Status and Payment of Fines
As of October 1, a charity's registration will expire if it does not file its renewal and financial report by the deadline. Organizations that are in a "delinquent" status as of October 1, meaning they have not renewed by the deadline or received an extension, will be changed to the new "expired- may not solicit status" as part of the transition. If they renew within seven days of the second notice of expiration, no penalty will be assessed.
Rather than automatically suspending charities and assessing fines, charities would have to pay fines when they reinstate their registration. Charities must file a reinstatement form, file a financial report for the most recent fiscal year, pay applicable fees and fines, and either certify that it was exempt for years it was not registered or file financial reports for up to the past three fiscal years.
Fines continue to be $60 for an overdue renewal, report, or amendment, and $300 for soliciting prior to registering. Organizations that solicit contributions without registering must provide financial reports for the last three years (rather than two years) or the period of solicitation, whichever is shorter. Fines will be referred to collections if they are not waived or paid within 60 days (rather than 90 days) of the fine notice.
Suspension and Administrative Hearings
A charity's registration will be suspended if the Secretary does not receive an overdue financial report, or a request for hearing, by the 63rd day (rather than the 60th day) after the original or extended deadline. Charities may not solicit contributions, provide consulting services, file a solicitation notice, or conduct a solicitation campaign while suspended or revoked. A charity may request a hearing if its registration is denied, suspended, or revoked. The Secretary will set up and give notice of an administrative hearing within seven days of receiving the request.
Filing Deadlines and Extensions
Filing deadlines continue to be 5 months and 15 days after the close of the organization's calendar or fiscal year for most charities. If the charity has requested an extension from the Internal Revenue Service (IRS), the charity's deadline will be 8 months and 15 days after the close of the calendar or fiscal year. It may be necessary to also request a three month extension from the Secretary of State if a six month extension has been granted by the IRS. Newly-registered charities have five days to file a renewal or extension request if reporting financial information outside of the most recent fiscal year.
Waiver of Fines
Written requests to waive fines must be received no more than thirty days after the fine notice is mailed and frequency of requests for the past three years and past violations will be considered when a waiver is requested.
Waiver requests must include a detailed written explanation of the reason for the late filing such as a bona fide personal emergency, website errors, or basis of exemption from registration.
Within 30 days, a charity must report changes to its name, address, principals, corporate form, tax status, or other changes that materially affect its business identity. If there are inconsistencies between the charitable solicitations report, the Secretary may require the charity to file an amended Form 990.
The Secretary of State will mail two notices by first-class mail to the address of record for the charity. Courtesy reminders will also be sent by email to the charity's authorized board officer and, if applicable. third party preparer. Charities will no longer be required to maintain a registered agent for charitable solicitations reporting (but this will continue to be required for other business reports to the Secretary of State).
Exemptions in law have not changed. They include churches (as defined in federal law and regulations) and charities that do not intend to and do not actually raise gross revenue in excess of $25,000 or do not receive contributions from more than ten persons per fiscal year. Gross revenue excludes government and foundation grants. A charitable organization that is exempt from registering must indicate that it is exempt and the basis for that exemption.
The new rules do not make substantive changes to Rule 9, which requires organizations that solicit and/or receive contributions from Coloradans through the internet to register with the Secretary of State. An out of state charity is required to register if its non-internet activities meet the registration thresholds.
An out of state charity must also register if:
- it has a website that enables a donor to give online and either targets persons in Colorado with solicitations, receives 50 or more contributions per year from Coloradans, or raises the lesser of $25,000 or 1% of total contributions from Colorado; or
- has a website that does not allow online donations but directs Coloradans to give off-line or establishes other contacts with Colorado such as sending emails or other communications that promote the website.
2018 Rulemaking Hearing
The Colorado Secretary of State held a hearing on August 23, 2018 to update rules for the Colorado Charitable Solicitations Act. The hearing relates to rules modified due to the passage of HB 17-1158.
The Secretary released the final rules on September 21 and they took effect temporarily on October 1. The rules must be published in the Colorado Register for twenty days before they become permanent.
Click on the following buttons to read the proposed rules and our written comments on the draft of the rules. Read on for a summary of the significant changes.