Colorado Charitable Solicitations Act

Colorado recently revised its Charitable Solicitations Act ("the Act"), effective May 9, 2002. The revised Act requires charitable organizations that solicit funds within Colorado to register with the Colorado Secretary of State. The purpose of the registration is to allow prospective donors access to an organization's registration information and to protect these donors from fraudulent charities and dishonest solicitors.

Registration Requirements

The revised Act requires every charitable organization that intends to solicit contributions in Colorado to have contributions solicited on its behalf in Colorado; or participate in a charitable sale promotion in Colorado; and to register with the Colorado Secretary of State prior to engaging in any of these activities. This registration requirement applies to all means of solicitation.

Exceptions to the registration requirement are limited to:

1. Religious organizations that are exempt from filing a Federal Annual Information Return (Form 990);
2. Political parties, candidates for federal or state office and Political Action Committees that are already required to file financial information with Federal or State election commissions;
3. Charitable organizations that do not intend to and do not actually raise or receive gross revenue in excess of $25,000 during a fiscal year. Gross revenue for this exemption includes revenue from all sources, excluding grants from governmental entities or organizations exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code;
4. Charitable organizations that do not intend to or do not actually receive contributions from more that 10 persons during a fiscal year.

The Act also includes registration requirements for paid solicitors and professional fundraising consultants, as well as procedural requirements for solicitation campaigns.

Initial Registration

The Secretary of State's office requires that the charitable organization's initial registration be done online through the Secretary of State's web site, at www.sos.state.co.us . Instructions at the web site will lead an organization through the steps of establishing an account, obtaining a user ID and password and a charitable registration number. This information must be retained for future filings with the State.

Required information for the initial registration includes:

• Name of the organization;
• Address;
• Statement of purpose;
• Type of legal entity;
• Names of officers and directors;
• Whether the organization is tax exempt or not;
• Name of the custodian of financial records; and
• Financial information.

Regardless of the charitable organization's fiscal year end, the initial registration with the Secretary of State needs to be completed immediately if registration exceptions above do not apply. If financial information from the most recent year-end is not yet available, the organization should provide financial information from the prior year-end.

Annual Registration Updates

Registration must be updated annually and includes the filing of a financial report for the most recent fiscal year. Filings are due on or before the 15th day of the fifth calendar month after the close of each fiscal year in which the charity solicited funds in Colorado. Requests for extensions of time to file the financial form will be granted under terms, conditions and procedures applicable to obtaining an extension of time to file a Form 990 from the Internal Revenue Service.

Definitions

The complete Colorado Charitable Solicitations Act can be accessed at the Secretary of State's web site, and contains detailed definitions of what constitutes a charitable organization, contributions, solicitations, and more.

GHB as a Resource

Because of the signature and password requirements of the registration process, this filing must be completed by the nonprofit organizations. Your representatives at Gordon, Hughes & Banks, LLP are available to assist you with questions you may have. Please contact us at your convenience.