Nonprofit Alert: Additional New York State Filing Required by May 15By Magdalena M. Czerniawski | May 5, 2021
As a result of changes to Executive Law 172-B, effective January 1, 2021, certain organizations registered with the New York State Attorney General (AG) are required to file documents with the New York Department of State (DOS). To comply, organizations will file much of the same information that they are already filing with the New York State Charities Bureau with the DOS. Failure to file will result in canceled registration with the state.
This new filing requirement applies to most charitable organizations. Specifically, it applies to organizations that are:
Registered with New York Charities Bureau because they solicit contributions in New York, i.e., registered under Article 7-A,
Already filing an annual Form Char 500 with the New York Charities Bureau,
Required to submit an accounting report along with its filing, i.e., charities with gross revenue of $250,000 or more.
Organizations that meet the three criteria above must not only file Form Char 500 and Federal Form 990 with the AG but also submit a copy of these filings to the DOS. Note that this applies to all charities registered with the Charities Bureau regardless of if they are New York-based or foreign organizations.
This filing is due four-and-a-half months after year-end. Therefore, the first filing is due on May 15, 2021, (for calendar year organizations) similar to Form Char 500 filing. Executive Law 172-b states that if the documents are not filed within the prescribed time or if the organization fails to submit additional information requested, the AG shall cancel the organization’s registration. The law does add that time may be extended by the AG for a period not to exceed 180 days. It is not clear if the same extension applies to the filing with DOS or how to apply for such extension.
The DOS filing is an online filing and can be done on the DOS website. After submitting Form Char 500, Form 990 with all applicable schedules, and audited or reviewed financial statements, the organization also must pay a $25 filing fee. The payment needs to be made by check.
There is concern within the nonprofit community that the filing of Form 990, which includes Schedule B – Schedule of Contributors with the DOS could lead to the disclosure of donor sensitive information, including names and addresses. On its website, the DOS states that this would not happen. However, it is not known whether the DOS has policies in place to separate this sensitive schedule from the other filings that the DOS might make public. The DOS also states that if they find inconsistencies in the activities disclosed and filings, they might make those records public.
Changes to Executive Law 172-E create additional reporting obligations for 501(c)(3) organizations. In conjunction with filing the documents described above, organizations are required to include a “Funding Disclosure Report” if they make in-kind donations such as staff time, personnel, offices or office supplies over $10,000 to a 501(c)(4) organization. The funding report should include:
name and address of entity that made the in-kind donation,
name and address of entity that benefited from it,
names and addresses of persons who exert operational or managerial control over the entity making the donation,
date of such donation, and
description of the in-kind donation along with charitable purpose advanced by such donation if any, and any restrictions of use of such donations
The $10,000 threshold is counted during a six-month period starting January 1st and ending on June 30th or starting July 1st and ending on December 31st. This report has to be filed with the DOS within 30 days of the close of the reporting period. Such disclosure might be made public by DOS.
Lastly, changes to Executive Law 172-F require certain 501(c)(4) organizations to also file reports with DOS.
At the time of this writing, there is a Senate Bill S4817 sponsored by Senator Liz Krueger which, if passed, would help charitable organizations avoid the double filing requirement. Advocacy groups such as Lawyers Alliance are actively working to eliminate this new filing. Many organizations have signed a petition in hopes of eliminating the double filing, which can be accessed here.
Marks Paneth will continue to monitor developments and will provide updates as they become available. Contact Magdalena Czerniawski, Partner in the Nonprofit, Government & Healthcare Group, or your Marks Paneth advisor for more information.
About Magdalena M. Czerniawski
Magdalena M. Czerniawski, CPA, MBA, is a Partner at Marks Paneth LLP and a member of the firm’s Nonprofit, Government & Healthcare Group. With over 15 years of nonprofit industry experience, she provides tax services to a wide array of nonprofits, including charitable organizations, schools, social welfare organizations, affordable housing entities, professional associations, private foundations, healthcare organizations and hospitals. In addition to providing tax compliance services, Ms. Czerniawski also provides tax planning and advisory services.... READ MORE +