Maryland Nonprofits Updates Disclose It: Charitable Nonprofit’s Guide to Disclosure Requirements
Blog by Amy Coates Madsen, Standards for Excellence Director, Maryland Nonprofits
The Maryland Nonprofits Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector states that all nonprofits “must be aware of and comply with all applicable federal, state, and local laws.” Of course, disclosure laws are among the important laws with which all nonprofits should comply. Each year, we update Disclose It: A Charitable Nonprofit’s Guide to Disclosure Requirements to keep you up-to-date on this important area in nonprofit management. Some of the topics covered in the publication include:
• Proper registration for organizations soliciting contributions
Did you know that even nonprofits that engage in even a limited amount of public solicitation in Maryland must file a form with the Secretary of State’s office? Of course, those nonprofits that receive more than $25,000 in charitable contributions a year are required to register with the Secretary of State’s office under the Maryland Charitable Solicitations Act. For more information on registration requirements visit the Secretary of State’s website.
• Disclosure requirements in fundraising solicitations
Did you know that most nonprofits which are required to register with the Secretary of State’s office must include a disclosure statement on all written solicitations and receipts for contributions like the one below?
“A copy of our current financial statement is available upon request by contacting (name of organization) at (address and telephone number of organization). Documents and information submitted to the State of Maryland under the Maryland Charitable Solicitations Act are available from the Office of the Secretary of State for the cost of copying and postage.”
• Disclosure requirements regarding deductibility of your donor’s contributions
Did you know that donations of services are not tax deductible?
Did you know that raffle tickets are not tax deductible?
Did you know that you must tell your donors how much of their contribution is tax deductible?
• Disclosure requirements in fundraising receipts and acknowledgments
In most years, we revise Disclose It for one primary purpose: to update the IRS’ definition for the cost of an insubstantial premium/ token gift that nonprofits give donors in return for charitable gifts. This year, that amount is published at $10.40. Be sure to check out Disclose It for more details about thresholds for gifts and what would qualify as being 100 % tax deductible and what circumstances (when donors receive something of value in return for their contribution) make some part of a charitable gift not deductible as a charitable contribution.
Here’s an excerpt from Disclose It to give you a sneak peak!
• Giving items of insubstantial value to donors — The full amount of the payment may be tax-deductible if the item you provide to the donor is of insubstantial market value. The IRS considers the benefit to the donor insubstantial if:
(a) the fair market value of what the donor receives is less than either 2% of the amount of the contribution or $104 for 2014, whichever is less; or
(b) the amount of the contribution exceeded $52.00 or more, the benefits received by the donor are token items that include the logo or name of the organization, and the cost of the token item was less than $10.40 (for 2014).
• Disclosure requirements regarding financial documents that must be provided to a member of the public upon request
Did you know that if someone requests a copy of your 990, you may not ask for the reason of the request? And, you must provide a copy of the document (without your list of donors/contributors) for the last three years—you may charge for copying and postage if you wish.
Check out Disclose It for more information on other documents that nonprofits are required to provide upon request.
These are just a few of the topics covered in the latest Disclose It: A Charitable Nonprofit’s Guide to Public Disclosure Requirements. We hope you find this publication helpful. Call Maryland Nonprofits for questions or concerns in this area.
Did you also know that through its Standards for Excellence Institute, Maryland Nonprofits also produces a national version of Disclose It, which includes additional information about registration and disclosure for charitable solicitation in other states? If you are a member of Maryland Nonprofits and you’d like a copy of this document, please email the Members Only Document Download Center. There is a section showing the different disclosure requirements in the various states, including the brand new requirements for soliciting in Nevada (that just went into effect on January 1).
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