Fundraising often stands at the foundation of a nonprofit’s operations, as without funding, it can be difficult for some nonprofits to perform their essential operations. To protect residents, however, Illinois nonprofits and 501(c)(3) organizations need to abide by Illinois state laws when soliciting contributions from the public. One state law, the Illinois Solicitation for Charity Act, requires nonprofits to register with the Illinois Attorney General’s office and file annual reports.
Unless exempted from registration, your nonprofit must register before it can solicit contributions and continue its fundraising efforts. For legal guidance and representation, call Chicago IL nonprofit attorney James C. Provenza & Associates at (847) 729-3939. In the meantime, you can find more about fundraising registration rules for Illinois nonprofits below.
When Does a Nonprofit Need to Register
Every 501(c)(3) nonprofit in the State of Illinois, aside from organizations that are excepted (see below), will likely have to register with the Illinois Attorney General’s Charitable Trust and Solicitations Bureau. In general, registration is required whenever soliciting from the public, and failure to do so can result in fines and other penalties. And as a side note, you need to register and follow all fundraising laws before your organization attempts to solicit funds.
Organizations Exempt From Registration
Illinois law exempts several types of nonprofit organizations from registration before fundraising. Some of these organizations include:
- Religious organizations and their affiliates
- Educational institutions
- Membership organizations, such as fraternal, patriotic, social, educational, alumni organizations, and historical societies
- Appeals for single individuals, such as volunteers who solicit charitable contributions for a named individual
- Political organizations, bona fide unions, and political action committees
- Veterans organizations
- Volunteer firefighter organizations and their affiliates
- Nonprofits operating a nursery for infants awaiting adoption
- Local parent-teacher organizations
This is not an exhaustive list of exempt organizations, and it is important to remember that these organizations often have other registration requirements. Furthermore, some organizations are exempt from both registration and reporting requirements, while some organizations are exempt from one or the other.
How to Register in Illinois
To register your Illinois nonprofit in order to conduct fundraising efforts, then you need to register on your URS form. You can also use Illinois Form CO-1. With your registration application, you need to include:
- The organization’s articles of incorporation (or comparable document for other types of entities)
- By-laws (or comparable document for other types of entities, if any)
- IRS Determination Letter, or IRS Form 1023 or 1024
- Latest IRS tax return (if any)
- All required filing fees
When nonprofits have been in operation for some time, and would like to register to conduct fundraising, then that organization also needs to include financial statements for the 3 past years and copies of IRS tax returns for those 3 years.
Annual Reporting Requirements for Illinois Nonprofits
Many 501(c)(3) nonprofits also need to report to the Office of the Attorney General within 6 months of the nonprofit’s fiscal year end. Furthermore, different organizations have different filing requirements, which mostly depends on how much that organization raised in the fiscal year. For instance:
- Charities that receive more than $150,000 in contributions or more than $25,000 using a professional fundraiser, must report:
- The Illinois Charitable Organization Annual Report, Form AG990-IL
- The organization’s IRS tax return
- Audited financial statements
- Any required filing fees
- Charities that receive more than $25,000 but less than $150,000, or less than $25,000 from a professional fundraiser, need to include the above-mentioned documents. However, the financial statements don’t need to be audited.
- Charities that receive more than $15,000 but less than $25,000 only needs to file Form AG990-IL
- Charities that receive less than $15,000 are not required to file annual reports
Contact James C. Provenza for Your Illinois Nonprofit
Without fundraising, many nonprofits right here in Illinois would be unable to continue operations. In fact, some of the major nonprofits need substantial funds to conduct their charitable efforts and ensure that experts are leading the nonprofit’s mission. Fortunately, with proper registration and annual reporting, your nonprofit can legally solicit funds from the public in Illinois. Whether you need legal help with your fundraising efforts, or any legal guidance and representation for your nonprofit, call Chicago nonprofit attorney James C. Provenza at (847) 729-3939 today.