RSA 7:19, et seq., of the New Hampshire Revised Statutes Annotated require all New Hampshire charities, and any out-of-state charities planning to solicit donations from New Hampshire citizens, to register with and report to the Attorney General.
If the answer to any of these questions is Yes, you are required to register with the NH Attorney General (RSA 7:21).
An Investigative Paralegal processes all applications. You can reach the Investigative Paralegal by calling (603) 271-3591 or by e-mail at [email protected].
Once you are registered, you will receive a Certificate of Registration signed by our Assistant Director of Charitable Trusts, together with a cover letter stating when your first annual financial report is due to be filed as required by RSA 7:28. Forms are available from the Unit and from our website, and will be mailed to the organization every year as a reminder.
Yes, we have many publications on our website.
Pursuant to RSA 7:19-a, I, a "Pecuniary benefit transaction'" means a transaction with a charitable trust in which a director, officer, or trustee of the charitable trust has a financial interest, direct or indirect.
RSA 7:19-a, I states that the following shall not be considered pecuniary benefit transactions:
(1) Reasonable compensation for services of an executive director, and expenses incurred in connection with official duties of a director, officer, or trustee;
(2) A benefit provided to a director, officer, or trustee or member of the immediate family thereof if:
(A) The benefits are provided or paid as part of programs, benefits, or payments to members of the general public; and
(B) The charitable trust has adopted written eligibility criteria for such benefit in accordance with its bylaws or applicable laws; and
(C) The director, trustee, or family member meets all of the eligibility criteria for receiving such benefit;
(3) A continuing transaction entered into by a charitable trust, merely because a person with a financial interest therein subsequently becomes a director, officer, or trustee of the charitable trust.
RSA 7:19-a, II (c) & (d) details what information a charitable trust must disclose regarding a pecuniary benefit transaction.
(1) Subsection II (c) requires the charitable trust to maintain a list disclosing each and every pecuniary benefit transaction, including the names and amount of the benefit. The list must be made available for inspection by members of the governing board and contributors. The list must be reported to the director of charitable trusts as part of the annual report and must reference the specific amount of the benefit received by the director, officer, or trustee.
(2) Subsection II (d) requires that if the transaction, or the aggregate of transactions with the same director, officer, or trustee within one fiscal year, is in the amount of $5,000 or more, the charitable trust must publish notice thereof in a newspaper of general circulation in the community in which the charitable trust's principal New Hampshire office is located, (or if there is no such office, then in a newspaper of general circulation throughout the state). Such notice must be made before consummating the transaction.
(3) Subsection II (d) further requires that written notice be sent to the Director of Charitable Trusts before consummating the transaction.
(4) Subsection II (d) requires that the notice state that it is given in compliance with this section. Further, the notice shall state the name of the charitable trust, the name of any director, officer, or trustee receiving pecuniary benefit from the transaction, the nature of the transaction, and the specific dollar amount of the transaction.
Yes, RSA 7:19-a further defines what conditions must be present in order for a pecuniary transaction to be allowed, including notification to board members, board discussion and voting procedures, and documentation in the board meeting minutes. Board members of charitable trusts have a duty to be fully informed before pursuing financial transactions that may result in a pecuniary benefit.
A New Hampshire nonprofit organization that decides to wind up operations must take certain steps to dissolve and distribute any remaining assets. These steps occur after the board votes to cease operations but before any remaining assets are distributed. The winding up process involves the Charitable Trusts Unit and the Secretary of State's Office. The process may also require notification to the Internal Revenue Service.
The basic steps are as follows:
1. Vote to dissolve is made by a quorum of the board members or, if required by the bylaws, a majority of the board members and/or the corporation's membership. The dissolving corporation must pay all outstanding debts and obligations.
2. File a Statement of Dissolution with the Secretary of State. This form is available from the Secretary of State's Office.
3. Contact the Charitable Trusts Unit and provide the following information regarding final distribution of assets:
a. The recipient organization's full legal name, address, telephone number, and tax ID number;
b. An itemized listing of assets to be distributed, by type and value;
c. The proposed date of distribution;
d. A listing of any restrictions on the use of the assets to be distributed;
e. A copy of the recipient's Articles of Incorporation or trust instrument;
f. A signed copy of the Statement of Dissolution filed with the Secretary of State; and
g. The final financial report showing the distribution of any remaining assets.*
4. If the organization was recognized as a 501(c)(3) entity, file a final Form 990 or 990EZ with the Internal Revenue Service.
*Assets must be distributed in accordance with the articles of incorporation and bylaws of the dissolving charitable organization and are subject to the terms of any trust under which the assets are held. The assets of a charitable nonprofit organization may not be distributed to individuals. A nonprofit organization holds its assets in trust for the specific purposes and activities stated in the organization's articles of incorporation. The transfer or disposition of any restricted assets held by the charity may be subject to court action. Any transfer of remaining assets inconsistent with the organization's stated purpose or with donor restrictions may be subject to legal action by the Attorney General.
People are frequently motivated to raise money to provide financial assistance to individuals in their community who encounter an unexpected financial difficulty. For example, when a young child is diagnosed with a serious illness people often want to raise money for that child's medical care. Fundraising for an individual is not a "charitable" purpose; a charity cannot be formed for the benefit of an individual. As such, during a fundraiser to benefit an individual you cannot refer to donations as tax deductible to the donor, and those donations must be claimed as ordinary income. Furthermore, if you open a bank account to hold the funds raised you may need to provide your personal information, including your social security number, and you could be personally liable for any lost or misused funds. You should talk to the bank in question regarding their policies and procedures before opening such an account. Finally, before engaging in any fundraising activities on behalf of an individual you should contact the IRS via telephone book or at www.irs.gov to ensure you are not running afoul of IRS requirements. Fundraising for Individuals Guidelines can be found here.
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New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301