Provider Organizations
A few state laws provide exemption from registration for volunteer rescue associations. A state charitable solicitation act may exempt volunteer ambulance organizations from its registration requirements.
A rare exemption from the registration requirements is for licensed medical care facilities, mental health organizations, and mental retardation centers. A charitable solicitation act may exempt from its registration and reporting requirements any nonprofit organization that operates facilities for the aged and chronically ill or nursing care facilities. Other exemptions are for volunteer health organizations and licensed health care service plans.
(h) Membership Organizations
Charitable solicitation acts are designed to apply to solicitations of the public to protect its members from fundraising fraud and other misuses of charitable dollars. This body of law is intended to ward off misrepresentation in charitable giving by ensuring an appropriate flow of information to prospective and actual donors, thus preventing their being duped into giving in circumstances where the contributions are diverted to noncharitable ends.
Consequently, when a charitable organization solicits its own “constituency” (such as a college soliciting its alumni), it is appropriate to regard the solicitation as a private one and thus exempt from the regulatory requirements.51 This exemption is based on the proposition that the regulatory protections are unnecessary because the donor's relationship with the donee charitable organization, by means of the membership status, is such that he, she, or it can easily obtain the requisite information without the need for intervention by the law.52
In reflection of this rationale, many states exempt organizations (or, in some instances, only certain categories of organizations)—but only from the registration or like requirements—that confine their solicitation to their membership. As noted, the scope of this exemption is confined by the definition accorded the term member or membership.
A few jurisdictions exempt organizations soliciting only their membership from the entirety of their charitable solicitation act.
These exemptions often are limited, such as where the solicitation is conducted only by members or where the conduct of the solicitation is solely by volunteers.
(i) Small Solicitations
For administrative convenience and to alleviate the burdens of regulation that would otherwise be imposed, many of the state charitable solicitation acts exempt small solicitation efforts from the registration or similar requirements. The definition as to what is small, however, varies considerably from state to state.
A provision in a solicitation act typically exempts from registration charitable organizations that do not intend to solicit and receive and do not actually solicit or receive contributions from the public in excess of $10,000 during a calendar year or do not receive contributions from more than 10 persons during a calendar year. While there are variations in the phrasing of these provisions, some states provide for this exemption with the threshold set at $25,000; a few states have this type of provision with a threshold of $10,000; other limitations are $8,000, $5,000, $4,000, $3,000, and $1,500. Often, this exemption is accompanied by a provision that triggers applicability of the registration requirement should contributions exceed the threshold amount. Thus, the state statute may add a rule that, if a charitable organization that does not intend to solicit or receive contributions from the public in excess of $10,000 during a calendar year does actually solicit or receive contributions in excess of such amount, whether or not all such contributions are received during a calendar year, the charitable organization shall, within 30 days after the date the contributions reach $10,000, register with and report to the appropriate agency.
This exemption may be confined to organizations in which fundraising is conducted wholly by volunteers.53
A few states provide for this exemption from the entirety of their charitable solicitation act.
As another approach to excluding small solicitations, some states exempt organizations that do not intend to annually receive contributions from more than 10 persons. On a rare occasion, a solicitation by a charitable organization is exempt where up to as many as 100 persons were solicited. There may be an exemption for these solicitations when conducted by a private foundation.
(j) Solicitations for Specified Individuals
Many states exempt from the registration and reporting requirements of their charitable solicitation acts solicitations that are solely for the benefit of specified individuals.
Thus, a charitable solicitation statute may make this exemption available for persons requesting contributions for the relief of any individual specified by name at the time of the solicitation when all of the contributions collected without any deductions whatsoever are turned over to the named beneficiary for his or her use. As this phrasing indicates, this exemption is usually voided where professional fundraising assistance is used.
As discussed, this type of exemption is often in conflict with the concept of solicitations for charitable purposes.
Rarely will these solicitations be exempt from the totality of the charitable solicitation act.
(k) Political Organizations
Some states exempt political organizations from the entirety of their charitable solicitation acts. Others exempt political organizations from the registration and reporting requirements of their acts. This is one of those exemptions that need not be stated, in that fundraising for political organizations is always outside the ambit of a state's charitable solicitation act.54
(l) Veterans' Organizations
Several states exempt veterans' organizations from the registration and reporting requirements of their charitable solicitation acts.
(m) Named Organizations
Some state charitable solicitation acts provide exemption—usually only from the registration requirements—for organizations identified by name.55
This practice is evidenced in provisions granting this type of exemption to the American Red Cross, boys' clubs, named educational institutions, Boy Scouts and Girl Scouts organizations, girls' clubs, the Junior League, Young Men's and Young Women's Christian Associations, and a children's trust fund.
(n) Other Categories of Exempted Organizations
The state charitable solicitation acts contain exemptions—usually from the registration requirements—for a variety of other categories of charitable organizations. The scope of these exemptions is vast: some expressly mandate a filing requirement for the exemption, solicitations only by volunteers, no private inurement, solicitations only of members, and other limitations.
This type of exemption, albeit with some restrictions in some states, may be extended to include firefighting organizations; fraternal organizations; social groups; patriotic organizations; historical societies; civic organizations; nonprofit
