Earlier this year the New York State budget contained a new filing requirement for certain non-profit organizations that solicit charitable contributions in the state.
Organizations that file under Article 7-A and have gross revenue exceeding $250,000 must now file their annual CHAR 500 financial report with the New York Department of Law and the New York Department of State (See N.Y. Exec. Law § 172-b(9)). Previously, the CHAR 500 was filed only with the Attorney General’s Charities Bureau (which falls under the New York Department of Law). This law is retroactive and is applicable for 2019 (fiscal year-end 2020) and 2020 (calendar & fiscal year-end) filings.
Under the new rule, an organization is subject to the new requirement to file its CHAR500 annual report with the Department of State if it:
- Is registered with the Charities Bureau under Article 7-A of the New York Executive Law to solicit charitable contributions in New York State;
- Annually files Form CHAR500 with the Charities Bureau; and
- Has more than $250,000 of total annual revenue and support.
Along with the Form CHAR500, organizations must submit copies of the IRS Form 990 and all required schedules (including Schedule B) and applicable financial statements for the most recent tax year.
Organizations must file on or before the 15th day of the 5th month after the organization’s year-end, which is generally May 15 for calendar year entities. The filing must be completed online at MY.NY.GOV. After filing, organizations must remit the required $25 filing fee by mail. Currently, it is unclear if an extension can be requested or how one can be obtained.
Additional requirements are imposed on organizations subject to Executive Laws 172-e and 172-f. Under Executive Laws 172-e and 172-f, certain 501(c)(3) and 501(c)(4) organizations are required to annually file Funding Disclosure Reports and Financial Disclosure Reports, respectively.
501(c)(3) Funding Disclosure Report
Executive Law 172-e applies to 501(c)(3) charitable organizations that make an in-kind donation of $10,000 or more to 501(c)(4) social welfare organizations that are required to file a source of funding report with the Joint Commission on Public Ethics (JCOPE). If required, the new 501(c)(3) Funding Disclosure Report must include the name and address of the 501(c)(3) and (c)(4) organizations, the name of at least one person who exerts managerial control over the 501(c)(3), the donation date, amount, and a description of the donation, including any restrictions on use of the donation. The report also must be accompanied by a mission statement and a Form 990, Schedule B regardless of whether one was filed with the Federal 990. If the Schedule B was filed as part of the annual financial report submission an additional copy is not required.
501(c)(4) Financial Disclosure Report
Executive Law 172-f applies to certain 501(c)(4) social welfare organizations that spend $10,000 or more in a twelve-month period on “covered communications.” A “covered communication” is defined as being conveyed to 500 or more members of the general public, and “refers to and advocates for or against a clearly identified elected official, executive or administrative body or legislative body relating to the sponsorship, support, opposition, or outcome of any proposed legislation, pending legislation, rule, regulation, hearing or decision, or advocates for or against action by any elected official, executive or administrative body or legislative body.”
If required, the new 501(c)(4) Financial Disclosure Report must disclose the name and address of the organization that paid for the covered communications as well as a detailed description of the covered communication. The names and addresses of the person or entity receiving the payments for expenditures must be provided along with the amount and dates those expenditures were paid. Also included will need to be the names and addresses of any donors whose donation was received by the 501(c)(4) in whole or in part for the support of the covered communication. The report also must be accompanied by a mission statement and a Form 990, Schedule B regardless of whether one was filed with the Federal 990. If the Schedule B was filed as part of the annual financial report, submission of an additional copy is not required.
The Funding and Financial Disclosure Reports must be filed with the Department of State within thirty days of the close of each semiannual reporting period. More specifically, reports are due before July 31 (covering January 1 – June 30) and January 31 (covering July 1 – December 31). The filing must be completed online. After filing, organizations must remit the required $25 filing fee via mail.
If you would like more information on how these changes affect your organization, please reach out to your personal Sciarabba Walker contact or email info@swcllp.com.
By Svetlana Svetlichnaya, CPA