Changes to Colorado Charitable Solicitations Act Effective October 1, 2018

Message from Colorado Secretary of State:

Several significant changes in law took effect on Monday, October 1, 2018, as summarized below.

The first change you might see is a notice from our office that your registration has expired. As part of the transition from the previous schedule and content of notifications to the new notification process, the secretary of state will re-set organizations in a delinquent status to the new “expired-may not solicit” status. Organizations will have an opportunity to renew without penalty, if they renew within seven days of the second notice of expiration. Organizations affected are those that were delinquent but not yet suspended as of 12:01 AM on October 1, 2018.

 Registration statements

A charitable organization’s registration is valid until the day on which the required financial report is due and may be renewed upon application to the secretary of state and payment of the registration fee and any assessed fines.

Charities will no longer be fined and suspended automatically for failure to timely renew a registration. Instead, fines will be assessed when an organization reinstates its registration and discloses that it should have been registered earlier, i.e. that it should not have allowed its registration to expire. Previously charity registrations were suspended and fines were assessed on the 61st day after the renewal deadline.

The registrations of paid solicitors and professional fundraising consultants will continue to be effective until the anniversary date of their initial registration, at which point they will expire. Like charities, paid solicitors and professional fundraising consultants will be allowed to renew without penalty if they do so within seven days of the second notice of the expired registration. Previously those registrations were suspended on the 61st day after the renewal deadline.

The registration of a paid solicitor still may be suspended for failure to timely file a solicitation campaign financial report.

 Amendments

A charity must report any changes of name, address, principals, corporate forms, tax status, and any other changes that materially affect the identity or business of the charity to the SOS within 30 days after the change.

 Expiration and withdrawal

A charitable organization that withdraws its registration or allows its registration to expire must, on or before the date of withdrawal or expiration, file a final financial report that includes information through the last date on which the organization solicited contributions in Colorado.

If no solicitation activity has occurred in Colorado since the fiscal year-end of the last approved financial report, you may simply allow the registration to expire.

A charity that is required to register cannot solicit contributions in Colorado or participate in a charitable sales promotion prior to reinstatement of an expired registration.

 Fines

Any registrant who, after sufficient notification, fails to properly register, renew a registration, file a financial report, or file a solicitation campaign financial report by the end of the seventh day following the issuance of the final notice, is liable for a fine in an amount established by rule.

The fine for charities that fail to timely file a renewal, financial report, or an amendment to replace initial estimates with actual financial information is $60 per overdue report for charities, and $200 per overdue renewal for paid solicitors and professional fundraising consultants. A charitable organization that fails to timely renew its registration and fails to file the financial report is only subject to a single fine for the failure to renew its registration.

The fine for soliciting before registering is $300 per year for a charitable organization or $1,000 per year for paid solicitors.

If a paid solicitor fails to file a solicitation notice at least 15 days before commencing a solicitation campaign, the secretary of state shall assess a $200 fine against the paid solicitor, at the time the paid solicitor files the solicitation notice.

 Notifications

The secretary of state will mail two notices by first-class mail to the address of record for the charitable organization, professional fundraising consultant, or paid solicitor when an organization’s registration expires. Organization can avoid fines by renewing within 18 days of the expiration date (i.e. within seven days of the second notice). After that, the organization must reinstate its registration and pay a fine for the overdue renewal.

The secretary of state will continue to send courtesy reminders of the approaching expiration date by email to the organization’s authorized officer and, if applicable, third-party preparer.

 Registered agent no longer required

It will no longer be necessary to name a registered agent on filings required by the Colorado Charitable Solicitations Act. Beginning October 1, 2018, the secretary of state will no longer send notifications to a registered agent named on earlier filings.

However, the requirement in the Colorado Corporations and Association Act to file a Statement of Foreign Entity Authority remains, and that filing does require a registered agent (see 7-90-801(5), C.R.S.).