Nonprofit regulation in Alabama
 in Alabama |
This article does not contain the most recently published data on this subject. If you would like to help our coverage grow, consider donating to Ballotpedia.
| Civil Liberties Policy |
|---|
|
| Nonprofit regulation |
| Privacy Policy Project |
| State information |
 |
Nonprofit regulation in Alabama involves a complex set of rules that govern nonprofit organizations and charitable giving throughout the state. Major issues surrounding nonprofit regulation nationwide include the following:
- contribution limits,
- donor disclosure, and
- the redefinition of issue advocacy.
Alabama is one of 39 states that require charitable organizations, and those intending to solicit on their behalf, to register with the state in order to solicit contributions, whether they are an Alabama organization or based out-of-state. In Alabama a large number of groups and organizations are exempt from registration. These groups, however, must still apply with the state for that exemption; it is not automatic.
Alabama is one of 32 states that allows registrants to use either the Unified Registration Statement (URS) or the state registration form.[1] Only seven states requiring registration do not accept the URS.
- Note: The following is not a how-to guide in managing an organization's registration and reporting requirements, but rather an attempt to share information about the relative degree of regulation governing nonprofit charitable activity at the individual state level. The information on this page was last updated in early 2015.
Background
According to the Foundation Center, there are over 1.5 million nonprofit organizations in the United States.[4] Section 501 of the U.S. tax code outlines which types of nonprofit organizations may be granted tax exempt status by the Internal Revenue Service. The section of this code that provides for exemption is section 501(a), which states that organizations are exempt from some federal income taxes if they fall under sections 501(c) or 501(d), or under section 401(a).[5]
Organizations classified as 501(c)(3) are nonprofit charitable, religious and educational organizations. These include organizations like the Red Cross and Habitat for Humanity as well as the American Civil Liberties Union and the Lucy Burns Institute, which provide, as defined in the federal code, “instruction of the public on subjects useful to the individual and beneficial to the community.”[6] Organizations granted 501(c)(4) status are political education organizations, and can engage in political lobbying. This includes donations to political committees that support or oppose ballot measures, bond issues, recalls or referenda. 501(c)(4) organizations can thus engage in issue advocacy, but they are not allowed to expressly advocate for the election or defeat of a particular candidate.
While the Internal Revenue Service designates eligible nonprofit charitable organizations with a federal tax exempt status, individual states require their own level of regulation and reporting, particularly when organizations attempt to solicit fundraising contributions. The amount of regulation required differs by state, as does the degree to which state regulations protect the privacy of individual donors. Three states, for instance, require annual copies of IRS Form 990 (schedule B), which lists individual contributors who contribute over a specified amount. Research shows that attempts to make contributions more transparent has an unintended negative effect on the number of contributors who give, as well as the amount.[3]
Governing agencies
The Consumer Protection section of the Alabama Attorney General's office is the agency in the state governing rules concerning donor solicitation and registration.
See law: Code of Alabama, sections 13A-9-70 through 13A-9-84
Registration requirements
Any nonprofit group or organization, unless exempt, located in Alabama must register with the Consumer Protection section. Any non-exempt nonprofit, in any state, intending to solicit in Alabama must also register, along with anyone intending to solicit in Alabama on behalf of a nonprofit. Nonexempt nonprofits might include traditional charitable organizations like the Red Cross or Habitat for Humanity, educational or policy organizations like the American Civil Liberties Union, or issue advocacy groups like the League of Conservation Voters.
Exemptions
A large number of groups are exempt from registering in Alabama, but must first apply for that exemption.
The following groups are exempt from registering:[7]
- Any group not intending to raise $25,000 in a year, if you have only unpaid fundraising volunteers.
- Any religious organization that also qualifies for 501(c)(3) status
- Education organizations
- IRS section 527 groups
- Fraternal organizations
- Civic leagues and civic organizations, which solicit solely from their own membership
- Any group intending to raise money for a single individual, up to $10,000, assuming all the money goes to the individual
- United Way and community chests
- Veterans organizations
- Volunteer firefighters
- Ambulance companies and rescue squads
Procedures
Nonprofits registering in Alabama can use either the Unified Registration Statement (URS) form or the state form. Any nonprofit using the URS does not need to complete any supplemental forms.[8][7]
Documents
The following documents are required along with your registration form:
- Articles of incorporation
- Bylaws
- IRS determination letter
- Alabama tax-exempt letter, if the group possesses one[7]
Signature and fee
A notarized signature of the group's president or other officer is required.
The registration fee is $25.[8]
Filing procedures
Registration materials must be mailed to:[8]
Office of the Alabama Attorney General
Consumer Protection
Attn: Charitable Organization Registration
Post Office Box 300152
Montgomery, Alabama 36130
Renewal
Registration is indefinite, unless canceled or withdrawn. Nonprofits must, however, notify the Consumer Protection section within 10 days if any initial registration information changes.[7]
Financial reporting
Although there is no renewal requirement, nonprofits registered in Alabama must file an annual financial report. Alabama's "Charitable Organization Renewal Statement" form, which is required, is due within 90 days after close of the group's fiscal year.[8][7]
Extensions
Organizations can seek a 180 day extension, if needed, until an IRS Form 990 is prepared.[7]
Fee
There is a $25 fee to submit the financial report.[7]
Recent news
This section links to a Google news search for the term "Alabama + donor + privacy"
See also
External links
Footnotes
- ↑ "Multistate Filing Form," accessed December 17, 2014
- ↑ Guidestar, Fundraising: What Laws Apply?" accessed February 18, 2015
- ↑ 3.0 3.1 London School of Economics, "Campaign finance laws that make small donations public may lead to fewer people contributing and to smaller donations," January 7, 2015
- ↑ Foundation Center, "Frequently Asked Questions," accessed December 17, 2014
- ↑ Cornell University Law School, "26 U.S. Code § 501 - Exemption from tax on corporations, certain trusts, etc," accessed January 13, 2015
- ↑ Cornell University Law School, "26 CFR 1.501(c)(3)-1 - Organizations organized and operated for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals," accessed January 13, 2014
- ↑ 7.0 7.1 7.2 7.3 7.4 7.5 7.6 Fishman, S. & Barrett, R. (2012). Nonprofit Fundraising Registration: The 50 State Guide. NOLO.
- ↑ 8.0 8.1 8.2 8.3 State of Alabama Office of the Attorney General, "Charitable Organizations," accessed January 21, 2015
