Required by S .C. Code Annual Financial Reports & Extension Requests §§ 33-56-60, -60(A) Deliverable Nos. 5 & 6 Cust omer: Charit able Organizat ions Registered charitable organizations must file an annual financial report with the Division of Public Charities using one of the following: IRS Form 990 IRS Form 990-EZ IRS Form 990 PF The S ecretary of S tate’s annual financial report form. There is no filing fee to submit the annual financial report. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 23 in S .C. (1994 Act . No. 461)
Required by S .C. Code Annual Financial Reports & Extension Requests §§ 33-56-60, -60(A) Deliverable Nos. 5 & 6 Cust omer: Charit able Organizat ions Annual financial reports are due 4 ½ months after the end of the charitable organization’s fiscal year. A charitable organization can request up to a six month extension to file their annual financial report. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 24 in S .C. (1994 Act . No. 461)
Number of Annual Financial Report and Extension Request Filings 16,026 15,725 15,277 18,000 14,785 16,000 14,000 5,663 6,152 6,787 6,619 12,000 10,000 8,000 6,000 10,062 9,874 8,490 8,166 4,000 2,000 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Annual Financial Reports Ext ension Request s 25
Required by S .C. Code S tate Payroll Deduction Application § 8-11-92 Deliverable No. 7 Cust omer: Charit able Organizat ions; Compt roller General’s Office These criteria include: Qualified to solicit under S olicitation of Charitable Funds Act. Provide direct and continuing The Division of Public services to S outh Carolinians. Charities determines if a Tax exempt under S ection 501(c)(3). charitable organization meets the criteria to receive Not a 501(c)(4), 501(c)(5), or 501(c)(6) organization, or primarily charitable contributions engaged in the propagation of a from state employees religious faith, in lobbying, or in through payroll deduction. political activity. Non-discriminatory. Has neither a parent or subsidiary Legislative Intent: that fails to meet these The Comptroller General, upon written authorization by any officer or qualifications. employee, may deduct from the salary or wages of any such officer or employee contributions to be paid 26 over to an eligible nonprofit charitable organization. (S ection 8-11-91)
Required by S .C. Code S tate Payroll Deduction Application § 8-11-92 Deliverable No. 7 Cust omer: Charit able Organizat ions; Compt roller General’s Office Payroll deduction applications eptember 1 st of are due on S each year. In previous years, the sole applicant has been the United Way; however, the United Way and its chapters submit a list of participatory nonprofits which are verified by the Division of Legislative Intent: Public Charities. The Comptroller General, upon written authorization by any officer or employee, may deduct from the salary or wages of any such officer or employee contributions to be paid 27 over to an eligible nonprofit charitable organization. (S ection 8-11-91)
DIVIS ION OF PUBLIC CHARITIES : FILINGS Types of professional fundraisers include: Professional S olicitors Professional S olicitor Companies Individual Professional S olicitors Professional Fundraising Counsel Commercial Co-venturers 28
DIVIS ION OF PUBLIC CHARITIES : FILINGS What is considered a “ professional solicitor” under the S olicitation of Charitable Funds Act? “ Professional solicitor” is defined as a person that, for monetary consideration, solicits contributions for or on behalf of a charitable organization. “ Professional solicitor” also means a person that plans, conducts, manages, carries on, advises, or acts as a consultant to a charitable organization in connection with the solicitation of contributions, but that does not qualify as a “ professional fundraising counsel” under the S olicitation of Charitable Funds Act. 29
Common Types of Professional S olicitors on File with the Division of Public Charities Thrift S tores & Telephone S olicitors Bingo Promoters Donation Bins Commission-Based Door-to-Door Fundraising Consultants 30
DIVIS ION OF PUBLIC CHARITIES : FILINGS What is considered a “ professional fundraising counsel” under the S olicitation of Charitable Funds Act? A “ professional fundraising counsel” is a person that for a fixed rate of compensation plans, conducts, manages, prepares materials for, advises, or acts as a consultant, directly or indirectly, in connection with soliciting contributions for or on behalf of a charitable organization, but that does not actually solicit contributions as a part of these services. A person whose compensation is computed on the basis of funds actually raised or to be raised is not a “ professional fundraising counsel” under the Act. 31
DIVIS ION OF PUBLIC CHARITIES : FILINGS What is considered a “ commercial co-venturer” under the S olicitation of Charitable Funds Act? A “ commercial co-venturer” is a person that regularly and primarily engages in trade or commerce for profit that, for the benefit of an organization, may raise funds by advertising that the purchase or use of goods, services, entertainment, or other thing of value benefits the charitable organization, if it is offered at a price comparable to similar goods or services on the market. 32
DIVIS ION OF PUBLIC CHARITIES : FILINGS Types of filings for professional fundraisers include: Registration Applications Notices of S olicitation & Contracts Joint Financial Reports 33
Required Filings for Different Types of Professional Fundraisers Type of Filing Professional Individual Professional Commercial Solicitor Professional Fundraising Co-venturer Company Solicitor Counsel Registration Y es Y es Y es Y es Application Notice of Y es No No Y es S olicitation Contract Y es No Y es Y es Joint Financial Y es No No Y es Report 34
Required by S .C. Code Registration Application for a Professional § 33-56-110 S olicitor Company Cust omer: Professional S olicit or Deliverable No. 8 Companies The annual registration fee is $50.00. The registration application must be renewed each year that the professional solicitor is active in S outh Carolina. The application must include a $15,000.00 surety bond. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 35 in S .C. (1994 Act . No. 461)
Required by S .C. Code Registration Application for an Individual § 33-56-110 Professional S olicitor Cust omer: Individual Professional Deliverable No. 9 S olicit ors Employed by Professional S olicit or Individual professional solicitors are Companies registered by the professional solicitor company that employs them. The application must disclose certain criminal convictions (e.g. fraud) and affirm disclosure requirements of the S olicitation of Charitable Funds Act. The annual registration fee is $50.00. The registration application must be renewed each year that the professional solicitor is active in S outh Carolina. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 36 in S .C. (1994 Act . No. 461)
Registration Application for a Professional Required by S .C. Code § 33-56-110 Fundraising Counsel Cust omer: Deliverable No. 10 Professional Fundraising Counsel The annual registration fee is $50.00. The registration application must be renewed each year that the professional fundraising counsel is active in S outh Carolina. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 37 in S .C. (1994 Act . No. 461)
Registration Application for a Commercial Required by S .C. Code § 33-56-110 Co-venturer Cust omer: Deliverable No. 11 Commercial Co-vent urers The annual registration fee is $50.00. The registration application must be renewed each year that the commercial co-venturer is active in S outh Carolina. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 38 in S .C. (1994 Act . No. 461)
Number of Professional Fundraisers Filing Registration Applications 1,981 1,852 2000 264 1,573 1,557 1800 280 226 1600 221 310 294 1400 225 241 1200 1000 1,380 1,246 800 933 919 600 400 200 111 105 105 103 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Professional S olicitor Companies Individual Professional S olicit ors Professional Fundraising Counsel Commercial Co-vent urers 39
Required by S .C. Code Notices of S olicitation & Fundraising Contracts § 33-56-70 Deliverable No. 12 Cust omer: Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- vent urers Professional solicitor companies, professional fundraising counsel, and commercial co-venturers must file copies of their fundraising contracts with the Division of Public Charities at least 10 days prior to beginning any solicitation activity or activity contemplated by the contract in S outh Carolina. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 40 in S .C. (1994 Act . No. 461)
Required by S .C. Code § 33-56-70 Notices of S olicitation & Fundraising Contracts Cust omer: Deliverable No. 12 Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- vent urers Professional solicitor companies and commercial co-venturers must file a Notice of S olicitation along with their contract, which clearly states the nature of the solicitation campaign, dates of the solicitation campaign, and terms of payment and remittance under the contract. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 41 in S .C. (1994 Act . No. 461)
Required by S .C. Code Joint Financial Reports § 33-56-70 Deliverable No. 13 Cust omer: Professional S olicit ors; Commercial Co-vent urers Professional solicit or companies and commercial co-vent urers must file a j oint financial report wit h t he Division of Public Charit ies wit hin 90 days of t he conclusion of a solicit at ion campaign, or wit hin 90 days of t he anniversary of a campaign last ing more t han one year. The j oint financial report must be signed by bot h t he professional fundraiser and t he charit y, and include t he following informat ion: The gross receipts from the campaign; An itemization of expenses; and Legislat ive Int ent : The amount paid to the charitable Regulat e manner, condit ions, organization. and procedures under which charitable funds may be solicit ed in S .C. (1994 Act . No. 461) 42
Number of Filings of Contracts, Notices of Solicitation and Joint Financial Reports 2,854 2,575 3,000 2,285 2,242 2,500 1,286 1,174 2,000 1,017 1,103 1,500 1,000 1,568 1,401 1,268 1,139 500 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Contracts and Notices of S olicit at ion Joint Financial Reports 43
Provided under S .C. Code §§ 33-56-30, -50, -60, -70, -110, -140(D) Filing Rej ections Cust omers: Charit able Organizat ions; Deliverable No. 14 Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- vent urers If a filing for a charitable organization or professional fundraiser does not contain the information required under the S olicitation of Charitable Funds Act, then the Division of Public Charities will rej ect it. Division of Public Charities staff first contacts the organization by email to attempt to correct the issue. If the organization does not respond, staff will return the filing to the organization along with a notice explaining the deficiency. The notice requests that the organization correct the filing and return it to the Division of Public Charities within 15 days. Legislat ive Int ent : Failure to correct and return the filing may result in the issuance of a notice Regulat e manner, condit ions, and procedures under which of violation and/ or administrative fine. charitable funds may be solicit ed 44 in S .C. (1994 Act . No. 461)
Total Number of Rej ections of Filings under Solicitation of Charitable Funds Act 4,175 4,500 4,075 4,000 3,481 3,500 3,000 2,500 2,147 2,000 1,500 1,000 500 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 45
DIVIS ION OF PUBLIC CHARITIES : ENFORCEMENT The S ecretary of S tate has the authority to investigate charities, professional fundraisers, and other persons for violations of the S olicitation of Charitable Funds Act. The S ecretary of S tate can issue investigative subpoenas, issue notices of violation and administrative fines, suspend charities and professional fundraisers, and file petitions for inj unctive relief with the S outh Carolina Administrative Law Court. 46
Required by S .C. Code § 33-56-140(B) Notice of Violation Cust omers: Charit able Organizat ions; Deliverable No. 15 Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- vent urers Once it has been determined that a violation of the S olicitation of Charitable Funds Act has occurred, the Division of Public Charities sends a Notice of Violation to the charitable organization or professional fundraiser alleged to have violated the Act. The Notice of Violation is sent by certified mail to the charitable organization or professional fundraiser’s last known address. Upon receipt of the Notice of Violation, the organization or professional fundraiser has 15 days to remedy the violation. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 47 in S .C. (1994 Act . No. 461)
Provided under S .C. Code §§ 33-56-60(E), -70(G), -75(D), -90(C), -110(H), Notice of Administration Fine -140(B) Cust omers: Deliverable No. 16 Charit able Organizat ions; Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- vent urers If the charitable organization or professional fundraiser does not remedy the violation within 15 days of receipt of the notice, the Division of Public Charities issues a Notice of Administrative Fine against the charitable organization or professional fundraiser. The Notice of Administrative Fine is sent by certified mail to the charitable organization or professional fundraiser’s last known address. Upon receipt of the Notice of Administrative Fine, the charitable organization or professional fundraiser has 30 days to pay the fine or file Legislat ive Int ent : an appeal with the Administrative Law Court. Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 48 in S .C. (1994 Act . No. 461)
Provided under S .C. Code §§ 33-56-60(E), -70(G), -75(D), -90(C), -110(H), Notice of Administration Fine -140(B) Deliverable No. 16 Cust omers: Charit able Organizat ions; Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- vent urers Under the S olicitation of Charitable Funds Act, the maximum fine is $2,000.00 for each separate violation. Fines for certain filing violations are calculated at a rate of $10.00 per day late, not to exceed $2,000.00. These violations include late annual financial reports, late professional fundraiser violations, late contracts, and late j oint financial reports. For these fines, the Division of Public Charities will send an initial Notice of Administrative Fine that notifies the recipient that the fine has begun accruing. Once the late filing is submitted or 200 days have passed (at which point the maximum fine of $2,000.00 is assessed), the Division of Public Legislat ive Int ent : Charities will send a Notice of Administrative Fine Invoice. Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 49 in S .C. (1994 Act . No. 461)
Provided under S .C. Code § 33-56-140(E) Notice of S uspension Cust omers: Deliverable No. 17 Charit able Organizat ions; Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- vent urers If the charitable organization or professional fundraiser does not pay the fine or file an appeal with the Administrative Law Court, the Division of Public Charities issues a Notice of S uspension to the charitable organization or professional fundraiser. The Notice of S uspension is sent by certified mail to the charitable organization or professional fundraiser’s last known address. Upon receipt of the Notice of S uspension, the charitable organization or professional fundraiser has 30 days to file an appeal with the Legislat ive Int ent : Regulat e manner, condit ions, Administrative Law Court. and procedures under which charitable funds may be solicit ed in S .C. (1994 Act . No. 461) 50
• An organization has 15 days after receipt Notice of of the Notice of Violation to cease or Violation remedy the violation before a fine is issued. • Upon receipt of the Notice of Notice of Fine, the organization has 30 days Administrative to pay the fine or file an appeal with the Fine Administrative Law Court. • If t he organizat ion does not pay t he Notice of fine or file an appeal, t he Division S uspension of Public Charit ies may suspend it s regist rat ion. 51
Number of Notices Issued Against Charitable Organizations and Professional Fundraisers 3,948 4,000 3,561 3,419 3,293 3,500 3,000 2,500 2,113 2,022 1,941 2,000 1,690 1,500 1,000 607 482 451 394 500 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Not ices of Violat ion Not ices of Fine Not ices of S uspension 52
Total Fine Revenue Collected from Enforcement of Solicitation of Charitable Funds Act 400,000 $371,670 350,000 $301,182 $282,190 $277,180 300,000 250,000 200,000 150,000 100,000 50,000 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 53
Provided under S .C. Code § 33-56-140(E) Appeal of Administrative Action Cust omers: Charit able Deliverable No. 18 Organizat ions; Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- Appeals Filed under Solicitation of vent urers; Ot her Charitable Funds Act Persons Assessed a Fine or Had A charitable organization, professional Regist rat ion S uspended or Rej ect ed fundraiser, or other person who has 1 been assessed an administrative fine, 2 or who has had their registration suspended or rej ected, may file an appeal with the Administrative Law 3 Court within 30 days of receipt of the 2 certified notice. Legislat ive Int ent : Regulat e manner, condit ions, FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 and procedures under which charitable funds may be solicit ed in S .C. (1994 Act . 54 No. 461)
Provided under S .C. Code §§ 33-56-140(C), -140(E) Petition for Inj unctive Relief Cust omers: Deliverable No. 19 Charit able Organizat ions; Professional S olicit ors; Professional Number of Inj unctions Filed Fundraising Counsel; Commercial Co- 14 vent urers; Ot her The S ecretary of S tate may bring an Persons Who Have 12 action before the Administrative Law Violat ed S olicit at ion of Charit able Funds Act Court to enj oin a charitable organization, 10 professional fundraiser, or other person from violating the S olicitation of 8 Charitable Funds Act, or against a 6 charitable organization or professional fundraiser who has been suspended for 4 failure to pay an administrative fine. 2 Legislat ive Int ent : 0 Regulat e manner, condit ions, FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 and procedures under which charitable funds may be solicit ed in S .C. (1994 Act . 55 No. 461)
Provided under S .C. Code §§ 33-56-140(A), -160(A), Charitable S olicitation Complaint Form § 33-57-160(A) Deliverable No. 20 Cust omers: General Public ► In May 2017, the S ecretary of S tate launched its online charitable solicitation complaint form, in order to make it easier for customers to file a complaint regarding a charitable organization, professional fundraiser, or nonprofit raffle. ► Customers may also print out a paper form and mail it to the S ecretary of S tate’s Office. Legislative Intent: Regulate manner, conditions, and procedures under which charitable funds may be solicited in S .C. (1994 Act. No. 461); Only qualified tax-exempt entities, which are organized and operated for charitable purposes and which dedicate raffle proceeds to charitable 56 purposes, shall operate and conduct raffles. [S ection 33-57- 100(B)]
Number of Complaints Received through the Online Charitable Solicitation Complaint Form 90 82 78 80 70 60 50 40 30 14 20 10 0 FY 2016-17 FY 2017-18 FY 2018-19 57
Provided under S .C. Code § 33-56-140(A) Investigations of Charitable Organizations & Cust omers: Charit able Organizat ions; Professional Fundraisers Professional S olicit ors; Professional Fundraising Counsel; Commercial Co- Deliverable No. 21 vent urers ► In addition to receiving complaints through the online system, the Investigations Division receives and investigates inquiries from law enforcement, other state and federal agencies, and the media. ► The Investigations Division also reviews and audits the following to determine whether organizations are in violation of the registration requirements of the S olicitation of Charitable Funds Act: ► IRS Exempt Organization Master List ► Newly Formed Nonprofit Corporations ► Expired Charity List ► S Legislat ive Int ent : uspended Charity List Regulat e manner, condit ions, ► Media Reports and procedures under which charitable funds may be solicit ed in S .C. (1994 Act . No. 58 461)
Number of Investigations Opened 600 544 537 500 400 300 197 170 200 100 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 59
Provided under S .C. Code § 33-56-140(A) Investigative S ubpoenas Cust omers: Charit able Organizat ions; Deliverable No. 22 Professional Fundraisers; Ot her Persons Providing S ervices t o Organizat ions Engaged in Charitable Number of Subpoenas Issued S olicit at ion 20 18 The S ecretary of S tate may 16 subpoena or audit persons and 14 require the production of 12 documents to aid in the 10 investigation of alleged violations of the S olicitation of Charitable 8 Funds Act. 6 4 2 0 Legislat ive Int ent : FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Regulat e manner, condit ions, and procedures under which 60 charitable funds may be solicit ed in S .C. (1994 Act . No. 461)
Provided under S .C. Code § 33-56-190 Multistate Enforcement Actions & Initiatives Cust omers: Ot her S t at e and Federal Deliverable No. 23 Agencies; General Public; Charit able Organizat ions; Professional Fundraisers Under S ection 33-56-190, the S ecretary of S tate may share information and engage in j oint enforcement actions and public information initiatives with other states and agencies. Because multiple states can pool resources and reach wider audiences, multistate actions make a greater impact in combating charitable solicitation fraud. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 61 in S .C. (1994 Act . No. 461)
Two recent mult ist at e act ions involving all 50 st at es, t he Dist rict of Columbia, t he Federal Trade Commission and ot her U.S . Territ ories were t he Cancer Fund of America Mult ist at e (announced in 2015) and Operat ion Donat e wit h Honor (announced in 2018). 62
Multistate Enforcement Actions and Public Education Initiatives 6 5 5 5 4 4 3 3 2 1 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 63 *S ome mult ist at e act ions spanned more t han one f iscal year.
Required by Provisos 96.2 Referral of Violations to Attorney General .C. Code §§ 33- and 96.3; S 56-90, -120 Deliverable Nos. 24 & 25 Cust omer: At t orney General Under Provisos 96.2 and 96.3, the S ecretary of S tate must refer disclosure and misrepresentation violations that result in fines of $10,000.00 or more to the Attorney General. Given the existing working relationship between the two agencies, the S ecretary of S tate’s Office does not believe this mandate is needed. S taff members of both agencies frequently communicate about issues involving charitable organizations and nonprofits, and the S ecretary of S tate refers any case that may require criminal investigation to the Attorney General, regardless of whether our office has issued a fine under the S olicitation of Charitable Funds Act. S ince they were first enacted in 2014, only one case has met the criteria for referral under the provisos. The case arose in 2014 and did not result in criminal prosecution. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which 64 charitable funds may be solicit ed in S .C. (1994 Act . No. 461)
Provided under S .C. Code Bingo Report to Department of Revenue § 33-56-80 Cust omer: Deliverable No. 26 Depart ment of Revenue In order to assist the Department of Revenue with enforcement of the Bingo Tax Act (S ection 12-21-3910 et. seq.), the Division of Public Charities sends a monthly report on the registration status of charitable organizations and professional solicitors engaged in charitable bingo. Bingo promoters that conduct bingo games for charitable organizations must be registered with the Division of Public Charities as a professional solicitor. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which 65 charitable funds may be solicit ed in S .C. (1994 Act . No. 461)
DIVIS ION OF PUBLIC CHARITIES : PUBLIC EDUCATION Under S ection 33-56-80, the S ecretary of S tate is required to publish and disseminate information to the public regarding the requirements and enforcement of the S olicitation of Charitable Funds Act. Educating potential donors about wise charitable giving is one of the best ways to combat charity fraud. 66
Provided under S .C. Code § 33-56-80 Charity S earch Engine & S uspended List Cust omer: Deliverable Nos. 27 & 28 General Public The S ecretary of S tate’s Office provides a Charity S earch feature on its website that indicates whether a charity is registered to solicit in S outh Carolina, and provides financial data from the charity’s last annual financial report. The S ecretary of S tate also provides a list of suspended charities that is updated daily. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which 67 charitable funds may be solicit ed in S .C. (1994 Act . No. 461)
Number of Unique Pageviews in FY 2017-18 According to Google Analytics 27,140 30,000 25,000 20,000 15,000 10,000 3,259 5,000 0 Charity S earch Engine S uspended List 68
Provided under S .C. Code § 33-56-80 Angel Announcement Cust omer: Deliverable No. 29 General Public Every year, S ecretary Hammond recognizes 10 “ Angel” charities in order to raise awareness about wise charitable giving. In order to be recognized as an Angel, a charity must meet the following criteria: The charit y must devot e 80% or more of it s expenses t o program services. The charit y must have been in exist ence for t hree or more years. The charit y must make good use of volunt eer services and not rely heavily on grant s. The charit y must be in compliance wit h Legislat ive Int ent : t he S olicit at ion of Charit able Funds Act . Regulat e manner, condit ions, and procedures under which 69 charitable funds may be solicit ed in S .C. (1994 Act . No. 461)
Provided under S .C. Code Wise Giving & Professional S olicitor Report § 33-56-80 Deliverable No. 30 Cust omer: General Public In conj unction with the Angel Announcement, the S ecretary of S tate’s Office releases a “ Wise Giving & Professional S olicitor Report.” The report provides financial data on all j oint financial reports filed by professional solicitors in the preceding calendar year, as well as data from current fundraising contracts. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which charitable funds may be solicit ed 70 in S .C. (1994 Act . No. 461)
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Provided under S .C. Code § 33-56-80 Wise Charitable Giving Brochure Cust omer: Deliverable No. 31 General Public The S ecretary of S tate’s Office distributes a Wise Charitable Giving brochure at public speaking engagements, and provides copies in its lobby and on its website. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which 73 charitable funds may be solicit ed in S .C. (1994 Act . No. 461)
Provided under S .C. Code Wise Charitable Giving Public S ervice Announcement § 33-56-80 Cust omer: Deliverable No. 32 General Public During the holiday season, the S ecretary of S tate’s Office runs public service announcements on television and radio to raise awareness about wise charitable giving. The public service announcements also notify viewers and listeners that they may file a complaint with the S ecretary of S tate’s Office using the Online Charitable S olicitation Complaint form. Legislat ive Int ent : Regulat e manner, condit ions, and procedures under which 74 charitable funds may be solicit ed in S .C. (1994 Act . No. 461)
Provided under S .C. Code § 33-56-80; § 33-57-110, -120, -130, -140, -150, - Wise Charitable Giving Presentations 160 Deliverable No. 33 Cust omers: General Public; Professional Associat ions; Civic Organizat ions; Ot her Ent it ies Each year, the S ecretary of S tate’s Office conducts wise charitable giving presentations throughout the state. Audiences include professional associations, civic groups, social clubs and other organizations with Legislative Intent: Regulate manner, conditions, an interest in the S olicitation of and procedures under which charitable funds may be solicited Charitable Funds Act. in S .C. (1994 Act. No. 461); Only qualified tax-exempt entities, which are organized and operated for charitable purposes and which dedicate raffle proceeds to charitable purposes, shall operate and conduct 75 raffles. [S ection 33-57-100(B)]
DIVIS ION OF PUBLIC CHARITIES : RAFFLES In addition to administering the S olicitation of Charitable Funds Act, the Division of Public Charities also regulates nonprofit raffles for charitable purposes, as provided under Chapter 57, Title 33 (S .C. Code of Laws § 33-57-100, et. seq.) 76
DIVIS ION OF PUBLIC CHARITIES : RAFFLES On November 4, 2014, S outh Carolina voters approved an amendment to the state constitution to allow nonprofit organizations to conduct raffles for charitable purposes. On March 5, 2015, the General Assembly ratified the constitutional amendment, and qualified nonprofits were able to legally hold raffles beginning on April 4, 2015. 77
DIVIS ION OF PUBLIC CHARITIES : RAFFLES S ection 33-57-110 defines “ raffle” as a game of chance in which a participant is required to pay something of value for a ticket for a chance to win a prize, and the winner is determined by a random drawing or similar process in which all participants have an equal chance of winning. 78
DIVIS ION OF PUBLIC CHARITIES : RAFFLES In order to hold a raffle, a nonprofit organization must be: A tax-exempt organization, or an organization of an educational institution; Operated for a charitable purpose; and In compliance with the S olicitation of Charitable Funds Act. A nonprofit organization must meet all three of these criteria to legally conduct raffles in South Carolina. 79
DIVIS ION OF PUBLIC CHARITIES : RAFFLES Nonprofit organizations which intend to conduct raffles may be required to register and file annual raffle financial reports with the S ecretary of S tate. Whether registration is required depends on the types of raffles the organization conducts. For purposes of filing requirements, S outh Carolina law categorizes raffles as either exempt or nonexempt. 80
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Required by S .C. Code § 33-57-120 Nonprofit Raffle Annual Registration Form Cust omers: Deliverable No. 34 Nonprofit Organizat ions If a nonprofit organization intends to conduct a nonexempt raffle, then it must file a raffle registration form. The annual registration fee is $50.00. The raffle registration will expire 4 ½ months after the end of the Legislat ive Int ent : Only qualified t ax-exempt ent it ies, nonprofit organization’s fiscal which are organized and operat ed for year. charitable purposes and which dedicate raffle proceeds t o charit able purposes, shall operat e and conduct 82 raffles. [S ect ion 33-57-100(B)]
Required by S .C. Code § 33-57-150 Nonprofit Raffle Annual Financial Report Cust omers: Deliverable No. 35 Nonprofit Organizat ions A nonprofit organization that registers to conduct nonprofit raffles must also file a raffle financial report. The raffle financial report is due 4 ½ months after the end of the nonprofit organization’s fiscal year. Legislat ive Int ent : There is no filing fee required Only qualified t ax-exempt ent it ies, which are organized and operat ed for to submit the raffle financial charitable purposes and which report. dedicate raffle proceeds t o charit able purposes, shall operat e and conduct raffles. [S ect ion 33-57-100(B)] 83
Total Number of Raffle Filings 1,430 1,402 1600 1400 1,079 1200 683 763 1000 616 534 800 600 166 747 400 639 545 450 200 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Raffle Regist rat ion Forms Raffle Financial Report s 84
Provided under S .C. Code §§ 33-57-120(C), -150(C), - Nonprofit Raffle Filing Rej ection 160(C) Deliverable No. 36 Cust omers: Nonprofit Organizat ions; Persons Operat ing Raffles for Charitable Purposes Raffle Rej ections 70 If a nonprofit organization or other person files a raffle 60 58 registration, but does not meet 50 the statutory requirements to 40 conduct raffles, then the 38 31 Division of Public Charities will 30 rej ect the filing. 20 20 10 0 Legislat ive Int ent : Only qualified t ax-exempt FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 ent it ies, which are organized Raffle Rej ections and operated for charit able purposes and which dedicat e raffle proceeds t o charit able purposes, shall operat e and 85 conduct raffles. [S ect ion 33-57- 100(B )]
Provided under S .C. Code Nonprofit Raffle Notice of Administrat ive Fine & §§ 33-57-120, -130, -140, -150, -160(B), -160(C) Notice of S uspension Cust omers: Nonprofit Organizat ions; Deliverable Nos. 37 & 38 Persons Operat ing Raffles for Charitable Purposes An organization which fails to file its annual raffle financial report on time may be assessed by the S ecretary of S tate an administrative fine of $10.00 for each day of noncompliance, not to exceed $2,000.00 for each separate violation. The S ecretary of S tate may impose administrative fines of up to $500.00 and/ or seek inj unctive relief for any other violations of the statutory provisions governing raffles. The S ecretary of S tate may assess an administrative fine of up to $500.00 for each violation and each day a person or organization is in violation of the law. Legislat ive Int ent : Only qualified t ax-exempt Failure to pay the fine and/ or file the report may result in revocation of the ent it ies, which are organized and operated for charit able organization’s registration. purposes and which dedicat e raffle proceeds t o charit able 86 purposes, shall operat e and conduct raffles. [S ect ion 33-57- 100(B )]
Number of Notices Issued for Raffle Violations 450 419 400 350 300 250 187 200 151 150 100 50 16 16 11 2 1 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Not ices of Fine Not ices of S uspension 87
Total Fine Revenue Collected for Raffle Violations 12,000 $10,790 $10,240 10,000 8,000 $6,370 6,000 4,000 $1,250 2,000 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 88
Provided under S .C. Code §§ 33-57-160(B), -160(C) Nonprofit Raffle Appeals & Petitions for Inj unctive Relief Cust omers: Nonprofit Organizat ions; Persons Operat ing Raffles Deliverable Nos. 39 & 40 for Charitable Purposes; Ot her Persons Who Have Been Assessed a Fine or Had Regist rat ion If a person or organization is S uspended, Revoked or Rej ect ed assessed an administrative fine, has its registration suspended or revoked, or is denied registration by the S ecretary of S tate, that person or organization has 30 days to file an appeal with the Administrative Law Court. The S ecretary of S tate may also pursue inj unctive relief against Legislat ive Int ent : nonprofit organizations in the Only qualified t ax-exempt Administrative Law Court. ent it ies, which are organized and operated for charit able purposes and which dedicat e raffle proceeds t o charit able 89 purposes, shall operat e and conduct raffles. [S ect ion 33-57- 100(B)]
Provided under S .C. Code Nonprofit Raffle Investigations & Investigative S ubpoenas § 33-57-160(A) Cust omers: Deliverable Nos. 41 & 42 Nonprofit Organizat ions; Persons Operat ing Raffles for Charitable Purposes 25 The S ecretary of S tate may investigate nonprofit organizations to determine if they have violated the provisions of Chapter 57, 20 20 Title 33, or have filed false information with the Division of Public Charities. 15 15 Investigations may result from complaints received from the public, law enforcement, 11 other state or federal agencies (including 10 10 charity regulators), and media inquiries and reports. 5 The S ecretary of S tate may subpoena or 2 audit persons and organizations and require 1 the production of documents to aid in the 0 0 0 Legislat ive Int ent : FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 investigation of alleged violations of Only qualified t ax-exempt Chapter 57, Title 33. Raffle Invest igat ions S ubpoenas Issued ent it ies, which are organized and operat ed for charitable purposes and which dedicat e raffle 90 proceeds t o charit able purposes, shall operat e and conduct raffles. [S ect ion 33-57-100(B)]
Provided under S .C. Code §§ 33-57-110, -120, -130, Nonprofit Raffle Public Education— Brochure & Webinar -140, -150, -160 Deliverable Nos. 43 & 44 Cust omers: Nonprofit Organizat ions; General Public In order to educate the public about nonprofit raffles, the S ecretary of S tate provides a raffles webinar on its website and distributes a raffles brochure at public speaking engagements, in its lobby, and on its website. Information on raffles is also provided at wise charitable Legislat ive Int ent : giving presentations, as well Only qualified t ax-exempt as presentations to the ent it ies, which are organized and operat ed for charitable purposes nonprofit community. and which dedicat e raffle proceeds t o charit able purposes, 91 shall operat e and conduct raffles. [S ect ion 33-57-100(B)]
Nonprofit Raffles S unset Provision The provisions of Chapter 57 of Title 33 will be repealed on July 1, 2020 unless the General Assembly reauthorizes the provisions by j oint resolution. There are bills currently pending to repeal the sunset provision in both the House and the S enate: H. 4353 S . 719 92
Performance Measures Related to Charities Deliverables Performance Measure No. 1: Provide charity customers expanded accessibility 24/ 7 on mobile devices and upgraded online capabilities. Performance Measure No. 4: Protect data and records and provide staff additional tools to fulfill statutory duties. (Create centralized investigations database application for charities, professional fundraisers, raffles, investigations and trademark violations.) Performance Measure No. 6: Participate in multi-state enforcement actions to protect the citizens of the state. Performance Measure No. 7: Provide trainings to charity and raffle groups statewide. 93
Performance Measures Related to Charities Deliverables Performance Measure No. 8: Publish additional reports on the agency website to educate and protect charitable donors. Performance Measure No. 9: Develop educational material for target areas concerning charitable solicitation. Performance Measure No. 10: Protect charitable donors in the state through filing inj unctions against noncompliant organizations. 94
Performance Measure No. 1: Provide charity customers expanded accessibility 24/ 7 on mobile devices and upgraded online capabilities. Over the past few years, the S ecretary of S tate has initiated and implemented several upgrades and enhancements to its charities online filing system, which was launched in 2009. These upgrades and enhancements have included the following: Enhancements to make the online filing system more user friendly, reduce the number of filing errors, and implement legislative changes enacted in FY 2013-14 (proj ect initiated in FY 2013-14 and completed in FY 2014-15). Update charities database and system to accommodate nonprofit raffles legislation passed in FY 2014-15 (proj ect initiated in FY 2014-15 and completed in FY 2015- 16). Provide an online charitable solicitation complaint form to allow members of the public to file confidential complaints through the S ecretary of S tate’s website. (proj ect initiated in FY 2015-16 and completed in FY 2016-17). 95
Performance Measure No. 1: Provide charity customers expanded accessibility 24/ 7 on mobile devices and upgraded online capabilities. Over the past few years, the S ecretary of S tate has initiated and implemented several upgrades and enhancements to its charities online filing system, which was launched in 2009. These upgrades and enhancements have included the following: Enhancements to provide streamlined options for online filers to upload required documents, as well as a PDF of online registration forms (proj ect initiated and completed in FY 2016-17). Enhancements to provide charities, professional fundraisers, and raffles access to update records 24/ 7 through creation of an online account, and provide letters/ correspondence from Public Charities Division in an universally-readable format (proj ect initiated in FY 2016-17 and completed in FY 2018-19). Enhancements are currently in process to provide mobile phone and tablet compatibility for online customers (proj ect initiated in FY 2018-19). 96
Performance Measure No. 1: Provide charity customers expanded accessibility 24/ 7 on mobile devices and upgraded online capabilities. Percentage of Charities Filings Submitted Online 70% 60% 60% 58% 53% 50% 50% 50% 47% 46% 42% 40% 37% 33% 30% 27% 27% 20% 10% 0% FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Regist rat ions Annual Financial Reports 97
Performance Measure No. 1: Provide charity customers expanded accessibility 24/ 7 on mobile devices and upgraded online capabilities. Percentage of Professional Fundraiser Filings Submitted Online 40% 38% 35% 33% 31% 30% 28% 27% 26% 26% 25% 22% 20% 16% 17% 16% 16% 15% 12% 11% 10% 9% 8% 7% 6% 5% 0% FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Regist rat ions Contracts Joint Financial Reports 98
Performance Measure No. 1: Provide charity customers expanded accessibility 24/ 7 on mobile devices and upgraded online capabilities. Percentage of Raffles Filings Submitted Online 70% 60% 59% 50% 50% 49% 41% 42% 40% 39% 31% 30% 20% 18% 15% 10% 0% 0 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Regist rat ions Annual Financial Reports 99
Performance Measure No. 4: Protect data and records and provide staff additional tools to fulfill statutory duties. (Create centralized investigations database application for charities, professional fundraisers, raffles, investigations and trademark violations.) In FY 2017-18, a new investigations application was launched. This application provided a centralized database for investigative staff to track charities, professional fundraisers, and raffles investigations. Development of the application began in FY 2016-17. 100
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