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Repeal Of State Registration Requirements For Most Charitable Organizations Allows Charities To Focus On Their Mission But Could Leave Donors In The Dark

By Christina M. Noyes and Kyle B. Bate, Attorneys, Gust Rosenfeld P.L.C., September 18, 2013

The solicitation of charitable contributions will become less burdensome for charitable organizations and contracted fund raisers in Arizona as of September 13, 2013. New legislation repeals the Arizona initial and annual registration requirements for charitable organizations soliciting funds for charitable purposes. The Bill also repeals the registration requirements and the solicitation disclosure requirements for any contracted fund raisers. The registration requirements for persons and organizations soliciting money or other support in the name of American veterans are not repealed and will continue under procedures to be determined by the Secretary of State.

The Legislation was enacted to remove "unnecessary regulation" on charities to allow them to focus on their mission. This change is beneficial for charities but it may not be as beneficial for donors who may now have less information on charitable organizations, as well as having less consumer protection from the Attorney General's office.

Changes in the Law: Registration Requirements Repealed
On June 20, 2013, Governor Brewer approved House Bill 2457 of the Fifty-First Legislature 1st Regular Session repealing A.R.S. §§ 44-6552 through 44-6560. The repeal of these sections means that charitable organizations and contracted for fund raisers that wish to solicit contributions in Arizona after September 13, 2013 are not required to register or file a renewal registration with the Secretary of State. A "contracted for fund raiser" is a person who for profit solicits for a charitable organization. Contracted fund raisers were also required to register with the Secretary of State before engaging in solicitations for charitable organizations, even if the organization was itself exempt from having to register.

Persons Soliciting Funds on Behalf of American Veterans must Register
It remains unlawful for a person to solicit money or other support in the name of American veterans unless the veterans' organization for which the person is soliciting money or other support files a registration statement with the Arizona Secretary of State before soliciting any funds. The registration form is currently being prepared and will eventually be found on the Secretary of State's website. Anyone violating the registration requirement is guilty of a class 3 misdemeanor.

Failure to File
Nothing in the legislation, however, excuses past violations. If a charity chooses to become current for past delinquencies, the charity must pay the delinquent filing penalties, file the required forms and become current by September 12, 2013. Otherwise, anyone who fails to become current could be held guilty of a class 1 misdemeanor for the past violation of the statutes. If its failure to file were to be known and publicized, the charitable organization may also have a marketing challenge to overcome negative publicity.

For More Information
If you have questions about these or other business issues, please don't hesitate to contact one of our attorneys below:Christina M. Noyes - 602.257.7488 - cmnoyes@gustlaw.com
Michael H. Bate - 602.257.7406 - mhbate@gustlaw.com
Kyle B. Bate - 602.257.7437 - kbate@gustlaw.com

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