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Oren Saltzman discusses Maryland Solicitation Act and Unified Registration Statement for Charities

The Maryland Solicitation Act, contained in the Business Regulation Article under Title 6, provides that a charitable organization must register and receive a registration letter from the Secretary of State of Maryland before the charitable organization may solicit charitable contributions in Maryland, has charitable contributions solicited on its behalf in Maryland or solicits charitable contributions outside of Maryland if the organization is located in Maryland. There are exceptions to the registration requirements under the Maryland Solicitation Act, but that subject is beyond the scope of this article. Maryland requires not only registration but also annual financial reporting which keeps the attorney general of Maryland apprised about an organization’s operations with an emphasis on fundraising results and practices.

In 2014 the National Association of Attorneys General and the National Association of State Charities Officials collaborated in creating a multi-state standardized registration for charitable organizations. Most states in the United States including Maryland require registration as described above. Like Maryland, most states require that charitable solicitation within the borders of the state is subject to the state’s laws, and therefore, even if a charity is located outside of a state where solicitation registration is required the charity must register. Internet fundraising does not neatly confirm to existing models and can cause questions as to jurisdictional control over a charitable organization’s solicitations.

The National Association of State Charity Officials recognized the challenges posed by interstate solicitation and decided to create a uniform interstate registration. The Unified Registration Statement aims to standardize, simplify and economize compliance with the individual states’ registration. At this time most states which require registration have accepted this “standardized” registration format including Maryland.

The Unified Registration Statement is an alternative to the requirement of individual state registration forms. In those states which permit the Unified Registration Statement, a registering charity may use either the state form or the Unified Registration Statement. The Unified Registration Statement is most useful to charities soliciting funds regionally or nationally and may be used in any of the cooperating states as long as the individual registration laws of each state are complied with. A charity can fill out the Unified Registration Statement, fill in the state-specific items, pay the registration fee and file the form with the state in which the charity is registering. Then if the charity desires to fundraise in another state which accepts the Unified Registration Statement it may do so without having to actually register in another state. Many states require additional state-specific information, so charities should check with each state to make sure that no additional information is required to solicit funds in that state.

States exercise regulatory authority of charities in most states. A uniform registration form permitting a charity to solicit charitable contribution on a multi-state basis allows for efficiency and conformity in registration. Before registering a charity using an individual state form, you should consider using the Unified Registration Statement. For more information about the Unified Registration Statements or regarding the general requirement of registering a charitable organization to solicit funds please contact Oren Saltzman today.

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