The Solicitation of Charitable Funds Act gives the Secretary of State the authority to regulate charitable organizations and professional fundraisers. All charitable organizations which intend to solicit contributions or have contributions solicited on their behalf must register on an annual basis. In addition to the registration requirement, charitable organizations must also submit annual financial reports. Failure to submit reports to the Secretary of State’s Office may result in administrative fines of up to $2,000 per violation.
To view the full text of the Act, please click on the link below:
What is a charitable organization?
(1)(a) "Charitable organization" means a person, as defined in item (7):
(i) determined by the Internal Revenue Service to be a tax exempt organization pursuant to Section 501(c)(3) of the Internal Revenue Code;
(ii) that is or holds itself out to be established for any benevolent, social welfare, scientific, educational, environmental, philanthropic, humane, patriotic, public health, civic, or other eleemosynary purpose, or for the benefit of law enforcement personnel, firefighters, or other persons who protect the public safety; or
(iii) that employs a charitable appeal as the basis of solicitation or an appeal that suggests that there is a charitable purpose to a solicitation, or that solicits or obtains contributions solicited from the public for a charitable purpose.
What organizations are excluded from the definition of charitable organization?
(i) a church, synagogue, mosque, or other congregation organized for the purpose of divine worship, and integrated auxiliaries of them, or a religious organization determined by the Internal Revenue Service to be a tax exempt organization that is not required to file Internal Revenue Service Form 990, Form 990-EZ, or Form 990-N based on its religious classification. "Integrated auxiliaries", as used in this subsection, include men's or women's organizations, seminaries, mission societies, and youth groups affiliated with a church, synagogue, mosque, or other congregation organized for the purpose of divine worship; or
(ii) a candidate for national, state, or local office or a political party or other group required to file information with the Federal Election Commission or State Election Commission.
Who must register as a charitable organization?
All charitable organizations that solicit contributions or have contributions solicited on their behalf must register with the Secretary of State’s Office prior to any solicitation activity unless they fall under one of the statutory exemptions from registration.
What are the statutory exemptions from registration?
(A) The following are not required to file registration statements with the Secretary of State if their fundraising activities are not conducted by professional solicitors, professional fundraising counsel, or commercial co-venturers:
(1) an educational institution which solicits contributions from only its students and their families, alumni, faculty, friends, and other constituencies, trustees, corporations, foundations, and individuals who are interested in and supportive of the programs of the institution;
(2) a person requesting contributions for the relief of an individual specified by name at the time of the solicitation when all of the contributions collected, without deductions of any kind, are turned over to the named beneficiary for his use, as long as the person soliciting the contributions is not a named beneficiary;
(3) a charitable organization which (a) does not intend to solicit or receive contributions from the public in excess of twenty thousand dollars in a calendar year and (b) has received a letter of tax exemption from the Internal Revenue Service, if all functions, including fundraising activities, of the organization exempted pursuant to this item are conducted by persons who are compensated no more than five hundred dollars in a year for their services and no part of their assets or income inures to the benefit of or is paid to an officer or a member.
(4) an organization which solicits exclusively from its membership, including a utility cooperative;
(5) a veterans' organization which has a congressional charter; and
(6) the State, its political subdivisions, and an agency or a department of the State which are subject to the disclosure provisions of the Freedom of Information Act.
(B) A charitable organization that does not intend to solicit or receive contributions from the public in excess of seven thousand five hundred dollars during a calendar year is not required to file registration statements with the Secretary of State without regard to the fact that their fundraising activities are or are not conducted by professional solicitors, professional fundraising counsel, or commercial co-venturers.
Does an exempt organization have to file anything with the Secretary of State?
Yes. An exempt organization must file an Application for Exemption with the Secretary of State on an annual basis. Applications for Exemption are due 4 ½ months after the close of the charitable organization’s fiscal year. There is no fee associated with this filing. It is very important to remember, if at any time the charitable organization no longer qualifies for an exemption, it must immediately register as a charitable organization.
What is the registration process for a charitable organization?
ü Make sure the Registration Form is completely filled out (if you do not have enough space on the form, please attach additional pages). Our office will not process incomplete forms. They will be returned to the charitable organization. Late registration forms may result in a fine of up to $2,000 against the charitable organization.
ü Make sure the Registration Form is signed by the CEO and CFO of the charitable organization.
ü If you are a 501(c)(3) organization, make sure your IRS Tax Exempt Designation Letter is attached to your application.
A charitable organization must register with the Secretary of State on an annual basis. Registrations are due 4 ½ months after the close of the charitable organization’s fiscal year. For example, if the charitable organization’s fiscal year ends in July, the registration will be due on December 15th.
Charitable organizations that are subject to the registration requirements of the statute must submit annual financial reports to the Secretary of State’s Office within 4 ½ months of the close of their fiscal year. There is no fee associated with filing this report. Exempt charitable organizations do not have to file annual financial reports.
How does a charitable organization file an annual financial report?
A charitable organization may either submit the Secretary of State’s Annual Financial Report Form or the IRS Form 990, 990-EZ or 990-PF. There is no fee associated with this filing. These forms should be filled out completely and accurately. Company financial statements or balance sheets submitted alone without being attached to one of these forms are not acceptable. The Secretary of State’s Annual Financial Report Form should be signed by the CEO and CFO of the charitable organization. The IRS forms should be signed by an officer or director of the charitable organization, and if applicable, the preparer of the form.
What happens if the charitable organization is not able to complete its financial reports by the due date?
Charitable organizations may request an extension for filing financial reports with the Secretary of State’s Office. Charitable organizations which file the Secretary of State’s Annual Financial Report Form must send an extension request in writing to the Division of Public Charities. Charitable organizations which file an IRS form must send in a copy of IRS Form 8868, “Request for Extension in Filing Form 990.” Upon receipt of either of these forms, the Secretary of State’s Office will grant a three month extension for the filing of the financial report. Two extensions may be requested for a total of six months. If extensions are not sent in, administrative fines will begin to accrue for late financial reports.
Does the Secretary of State have the authority to assess administrative fines against a charitable organization?
Yes. If a charitable organization solicits contributions without being registered, submits false information to the Secretary of State, is delinquent in a filing or violates any other provision of the “Solicitation of Charitable Funds Act,” the Secretary of State may assess an administrative fine of up to $2,000 for each separate violation. It is extremely important that charitable organizations submit all forms and documents in a timely manner to avoid the assessment of administrative fines.
Can the Secretary of State’s Office investigate charitable organizations?
Yes. Pursuant to the statute, the Secretary of State’s Office may upon his own motion or the complaint of any person, investigate a charitable organization.
All documents and correspondence should be mailed to:
SC Secretary of State's Office
1205 Pendleton Street, Suite 525
Columbia, SC 29201.
Telephone inquiries may be directed to (803) 734-1790.
To obtain the forms for Charitable Organizations, follow the link below:
Charitable Organization Forms
General Charities Forms