Many nonprofits are unaware that it is unlawful to solicit charitable contributions in Virginia without registering with the Virginia Department of Agriculture and Consumer Services (VDACS) or obtaining a letter of exemption from the Commissioner of Agriculture and Consumer Services.
While the steps to register with the VDACS are not overly burdensome, they must be taken each year. Among other pieces of information that must be provided, the organization must inform the VDACS of the percentage of fundraising expenses for the most recent fiscal year, whether the organization hires a professional to engage in solicitation and how contributions received will be used by the organization.
The following is a list of some of the organizations that may be exempt from registration requirements:
(1) Organizations receiving less than $5,000.00 per year in contributions from the public if no professional solicitor is hired and no part of the assets or income inure to the benefit of any officer or member;
(2) Organizations that solicit only from their membership;
(3) Health care institutions granted §501(c)(3) status; and
(4) Civic organizations.
If an organization is exempt it must obtain a letter of exemption from the VDACS.
Nonprofits that fail to comply with Virginia’s solicitation of contribution laws face the possibility that the VDACS will publish a warning that the nonprofit may be soliciting contributions for non-charitable purposes. In addition, the knowing failure to comply with these laws is a misdemeanor, and the prosecution of a violation of these laws could result in a civil penalty of up to $5,000.00 per violation, plus expenses and attorney’s fees.
MartinWren, P.C.’s transactional attorneys practice Commercial and Residential Real Estate, Estate Planning and Administration, Business and Corporate Law, and Intellectual Property and Technology Law. MartinWren, P.C. also represents injured clients as Virginia Personal Injury Lawyers.