CHARITABLE
ORGANIZATIONS
FUND
RAISING COUNSEL
PROFESSIONAL
FUNDRAISERS
Charitable
Organizations
Q. What is a "Charitable
organization"?
A.
An organization that is described in section 501 (c) (3) of the internal
revenue code and that is exempt from taxation under section 501 (a)
of the internal revenue code.
A person who is or purports to be established for a charitable purpose.
Q. What is a "Charitable purpose"?
A.
A purpose described in section 501 (c) (3) of the internal revenue
code as:.
A benevolent, educational, philanthropic, humane, scientific, patriotic,
social welfare or advocacy, public health, environmental conservation,
civic or other eleemosynary objective.
Q.
What is a "Contribution"?
A.
A grant or pledge of money, credit, property or other thing of any kind
or value, except used clothing or household goods, to a charitable organization
or for a charitable purpose.
Q.
What isn't a “Contribution”?
A.
Income from bingo or raffles conducted in accordance with state law,
a government grant, or a bona fide fee, due or assessment paid by a
member of a charitable organization, except that, if initial membership
is conferred solely as consideration for making a grant or pledge of
money in response to a solicitation, the grant or pledge of money is
a contribution.
Q.
What does it mean to "Solicit"?
A.
It means to request, directly or indirectly, a contribution and to state
or imply that the contribution will be used for a charitable purpose
or will benefit a charitable organization.
“Solicitation"
is the act or practice of soliciting, whether or not the person soliciting
receives any contribution. "Solicitation" includes any
of the following methods of requesting or securing a contribution:
(a) An oral or written request.
(b) An announcement to the news media or by radio, television,
telephone, telegraph or other transmission of images or information
concerning the request for contributions by or for a charitable organization
or charitable purpose.
(c) The distribution or posting of a handbill, written advertisement
or other publication which directly or by implication seeks contributions.
Q.
When does the selling of books, flowers, candy and similar items become
a solicitation?
A . The sale of, or offer or attempt to sell, a membership or an advertisement,
advertising space, book, card, tag, coupon, device, magazine, merchandise,
subscription, flower, ticket, candy, cookie or other tangible item is
a solicitation if it is in connection with any of the following:
1.
A request for financial support for a charitable organization or charitable
purpose.
2. The use of or reference to the name of a charitable organization
as a reason for making a purchase.
3. A statement that all or a part of the proceeds from the sale
will be used for a charitable purpose or will benefit a charitable organization.
Q.
When does a charitable organization need to be registered in Wisconsin?
A.
If the charitable
organization solicits in this state or have contributions solicited
in this state on its behalf it must register with the department. There
are exceptions.
Q.
What are the exceptions?
A. The
following are not required to register
as charitable organizations:
1. A person that is exempt from filing a federal annual information
return under section 6033 (a) (2) (A) (i) and (iii) and (C) (i) of the
internal revenue code. (Please consult your attorney or tax advisor
to make this determination.
2. A candidate for national, state or local office or a political
party or other committee or group required to file financial information
with the federal elections commission or a filing officer under state
law.
3. A
charitable organization which does not intend to raise or receive contributions
in excess of $5,000 during a fiscal year, if all of its functions, including
solicitation, are performed by persons who are unpaid for their
services and if no part of its assets or income inures to the
benefit of, or is paid to, any officer or member of the charitable organization.
Generally, if a charitable organization raises or receives more than
$5,000 in contributions, it must, within 30 days after the date on which
its contributions exceed $5,000, register with the department .
4. A fraternal, civic, benevolent, patriotic or social organization
that solicits contributions solely from its membership.
5. A veterans organization incorporated under Wisconsin law
or chartered under federal law or the service foundation of such an
organization recognized in the bylaws of the organization.
6. A nonprofit, postsecondary educational institution accredited
by a regional accrediting agency or association approved under 20 USC
1099b, or an educational institution and its authorized charitable foundations
which solicit contributions only from its students and their families,
alumni, faculty, trustees, corporations, foundations and patients.
7. A person soliciting contributions for the relief of a named
individual if all contributions, without any deductions, are given to
the named individual.
8. A state agency, or
a local governmental unit.
9. A private school, as defined in Wis. Stats. s.
118.165.
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Fund-raising Counsel
Q.
What is a "Fund-raising counsel"?
A.
A person who, for compensation, plans, manages, advises, consults or
prepares material for, or with respect to, solicitation in this state
for a charitable organization, but who does not solicit and who does
not employ, engage or provide any person who is paid to solicit contributions.
"Fund-raising counsel" does not include an attorney, investment
counselor or employee of a financial institution who advises a person
to make a contribution or a bona fide employee, volunteer or salaried
officer of a charitable organization.
Q.
When must a fund-raising counsel be registered?
A.Generally,
if a fund-raising counsel at any time has custody of contributions from
a solicitation for a charitable organization that is required to be
registered,
the fund-raising counsel must be registered.
Q.
What if the charitable organization is not required to be registered?
A.
Then the fund raising counsel is not required to be registered, even
if the fund-raising counsel has custody of contributions derived from
solicitations.
Q.
Are there any exceptions?
A.
Yes. No registration is needed for a fund-raising counsel who does not
intend to earn more than $1,000 per year as a fund-raising counsel,
except that a fund-raising counsel who does not intend to earn more
than $1,000 but does earn more than $1,000 in a year must, beginning
30 days after actually earning more than $1,000 in a year, comply with
the registration requirements.
Also,
if the fund-raising counsel at any time has custody of contributions
for a charitable organization that is required to be registered, the
fund-raising counsel must register.
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Professional
fund-raiser
Q.
What is a "Professional fund-raiser"?
A.
A person who, for compensation, solicits in this state or employs, engages
or provides, directly or indirectly, another person who is paid to solicit
in this state. "Professional fund-raiser" does not include
an attorney, investment counselor or employee of a financial institution
who advises a person to make a charitable contribution, a bona fide
employee, volunteer, wholly owned subsidiary or salaried officer of
a charitable organization, an employee of a temporary help agency who
is placed with a charitable organization or a bona fide employee of
a person who employs another person to solicit in this state.
Q.
When must a professional fund-raiser be registered?
A.
No professional fund-raiser may solicit in this state for a charitable
organization that is required to be registered unless the professional
fund-raiser is also registered.
Solicitation
disclosure requirements
Q.
What must be disclosed when a solicitation is made on behalf of a charitable
organization that is required to be registered?
A.
Generally
if a professional fund-raiser or unpaid solicitor solicits a contribution
for a charitable organization that is required to be registered, the
professional
fund-raiser or unpaid solicitor must, at the time of the solicitation
or with a written confirmation of a solicitation, but prior to accepting
a contribution, make the following disclosures to the person from whom
the contribution is solicited:
(1) The name and location of the charitable organization.
(2) That a financial statement of the charitable organization
disclosing assets, liabilities, fund balances, revenue and expenses
for the preceding fiscal year will be provided to the person upon request.
(3) A clear description of the primary charitable purpose for
which the solicitation is made.
Q.
Are there any additional requirements that apply only to a professional
fund-raiser?
A.
Yes. If a solicitation is made orally, including a solicitation made
by telephone, the professional fund-raiser shall send a written confirmation,
within 5 days after the solicitation, to each person contributing or
pledging to contribute. The written confirmation shall include
a clear and conspicuous disclosure of the name of the professional fund-raiser
and that the solicitation is being conducted by a professional fund-raiser.
Q. Are there any restrictions on what a professional fund-raiser
can say?
A.
The professional fund-raiser may not represent that any part of the
contributions received by the professional fund-raiser will be given
or donated to a charitable organization unless that charitable organization
has, prior to the solicitation, consented in writing, signed by 2 authorized
officers, directors or trustees of that other charitable organization,
to the use of its name.
Also, the professional fund-raiser may not represent that tickets to
an event will be donated to an organization for use by others unless
all of the following conditions are met:
1. The professional fund-raiser has a commitment, in writing,
from the organization stating that the organization will accept donated
tickets and specifying the number of donated tickets that the organization
is willing to accept.
2. The professional fund-raiser solicits contributions for donated
tickets from no more contributors than the number of tickets that the
organization has agreed to accept.
Q.
Are there any exceptions to these disclosure requirements?
A.
Yes. A charitable organization that operates solely within one community
and that received less than $50,000 in contributions during its most
recently completed fiscal year may apply to the department for an exemption
from the disclosure requirements under this section.
Q.
Are there any other prohibited acts?
A.
Yes. No person may, in the planning, management or execution of a solicitation
or charitable sales promotion, do any of the following:
1. Use an unfair or deceptive act or practice.
2. Imply that a contribution is for or on behalf of a charitable
organization or use any emblem, device or printed matter belonging to
or associated with a charitable organization without first being authorized
in writing to do so by the charitable organization.
3. Use a name, symbol or statement so closely related or similar
to that used by another charitable organization that the use of the
name, symbol or statement would tend to confuse or mislead a person
being solicited.
4. Represent or lead anyone in any manner to believe that the
person on whose behalf a solicitation or charitable sales promotion
is being conducted is a charitable organization or that the proceeds
of the solicitation or charitable sales promotion will be used for charitable
purposes if that is not the fact.
5. Lead anyone in any manner to believe that another person sponsors,
endorses or approves a solicitation or charitable sales promotion if
the other person has not sponsored, endorsed or approved the solicitation
or charitable sales promotion in writing.
6. Use the fact of registration to lead any person to believe
that the registration constitutes an endorsement or approval by the
state.
7. Represent directly or by implication that a charitable organization
will receive a fixed or estimated percentage of the gross revenue raised
greater than that established under the contract between the fund-raiser
and the charitable organization. A professional fund-raiser and a charitable
organization that is required to be registered
must enter into a written contract that clearly states the respective
obligations of the professional fund-raiser and the charitable organization
and states the amount of gross revenue, raised under the contract, that
the charitable organization will receive. The amount of the gross
revenue that the charitable organization will receive shall be expressed
as a fixed percentage of the gross revenue or as an estimated percentage
of the gross revenue.
Q.
May a consumer request and receive from the department records filed
by registered persons or entities?
A.
Yes. Generally, registration statements, applications, reports, contracts
and agreements of charitable organizations, fund-raising counsel, professional
fund-raisers and unpaid solicitors and all other documents and information
retained by or filed with the department may be obtained by making a
request to the department.
Q.
What information can the public not obtain from the department?
A.
Any disclosure regarding the name and address of a contributor and the
date and amount of the contribution.
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