CHAPTER 50-22
CHAPTER 50-22
CHARITABLE ORGANIZATIONS SOLICITING CONTRIBUTIONS
50-22-01. Definitions. As used in this chapter, unless the context otherwise requires:
1.
"Accounting year" means the twelve-month period on which a charitable
organization keeps its financial records.
2.
a.
"Charitable organization" means a person that engages in or purports to
engage in solicitation for a charitable purpose and includes a chapter, branch,
area office, or similar affiliate or a person soliciting contributions within the state
for a parent charitable organization.
b.
The term "charitable organization" does not include:
(1)
An organization that solicits funds for an institution of higher learning.
(2)
An organization that uses only volunteer unpaid fundraisers and that
solicits funds for a political subdivision or other government entity or for a
civic or community project in which the contributions received are used
solely for the project and none of the contributions inure to the benefit of
any individual.
(3)
A private or public elementary or secondary school.
(4)
A charitable organization or person that solicits contributions for any
person specified by name at the time of the solicitation if all the
contributions received are transferred within a reasonable time after
receipt to the person named or that person's parent, guardian, or
conservator with no restriction on their expenditure and with no
deduction.
(5)
A religious society or organization that is exempt from filing a federal
annual information return pursuant to Internal Revenue Code section
6033(a)(2)(A)(i) and (iii) [26 U.S.C. 6033(a)(2)(A)(i) and (iii)] or Internal
Revenue Code section 6033(a)(2)(C)(i) [26 U.S.C. 6033(a)(2)(C)(i)].
(6)
Any candidate for national, state, or local elective office or political party
or other committee required to file information with the federal election
commission, a state election commission, or an equivalent office or
agency.
3.
"Charitable purpose" means a charitable, benevolent, philanthropic, religious, social
service, welfare, educational, cultural, artistic, or public interest purpose, either
actual or purported.
4.
"Contribution" means cash or the promise, grant, or pledge of any money, credit,
assistance, or property of any kind or value, including the promise to pay, provided
in response to a solicitation. "Contribution" includes, in the case of a charitable
organization offering goods and services to the public, the difference between the
direct cost of the goods and services to the charitable organization and the price at
which the charitable organization or a person acting on behalf of that organization
resells those goods or services to the public.
"Contribution" does not include
bona fide fees, dues, or assessments paid by members of an organization, provided
that:
a.
Membership is not conferred in exchange for a contribution in response to a
solicitation; or
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b.
Membership provides no benefit in addition to the right to vote or otherwise
participate in the organization and the right to receive literature.
5.
"Person" means any individual, organization, association, partnership, corporation,
or limited liability company.
6.
"Professional fundraiser" means a person who, for financial compensation or profit,
performs for a charitable organization a service in connection with which
contributions are, or will be, solicited in this state by the compensated person or by a
compensated person the person employs, procures, or engages to solicit; or a
person who for compensation or profit plans, manages, advises, consults, or
prepares material for, or with respect to, the solicitation in this state of contributions
for a charitable organization. A bona fide full-time salaried officer or employee of a
charitable organization maintaining a permanent establishment within the state may
not be deemed to be a professional fundraiser.
An attorney, investment counselor, or banker who advises any person to make
a contribution to a charitable organization may not be deemed, as the result of that
advice, to be a professional fundraiser.
7.
"Solicitation" and "solicit" mean the request to the public or member of the public for
a contribution on the representation that the contribution will be used in whole or in
part for a charitable purpose, including:
a.
An oral request made in person or by telephone, radio, television, electronic
communication including the internet, or other advertising or communication
media;
b.
A written or other recorded or published request, that is mailed, sent, delivered,
circulated, distributed, posted in a public place, or advertised or communicated
through any medium available to the public and described in subdivision a;
c.
A sale of or attempt to sell any good or service in which the good or service is
priced above fair market value or when it is otherwise represented that some
portion of the purchase price will be used for a charitable purpose; or
d.
An announcement inviting the public to attend an assembly, event, exhibition,
performance, or social gathering of any kind where admission is conditioned on
the receipt of a contribution or at which function contributions will be otherwise
solicited.
A solicitation is deemed to have occurred regardless of whether the party solicited
makes a contribution.
50-22-02. Registration of charitable organization.
1.
A charitable organization may not solicit contributions from persons in this state by
any means unless, prior to a solicitation, there is on file with the secretary of state
upon forms prescribed by the secretary of state a registration statement containing
the following information:
a.
Legally established name.
b.
Name or names under which it solicits contributions.
c.
Form of organization.
d.
Date and place of organization.
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e.
Business telephone number.
f.
Street and mailing address of principal office in this state, if any.
g.
Name and address of the person having custody of books and records within
this state.
h.
Total compensation, including salaries, fees, bonuses, fringe benefits,
severance payments, and deferred compensation, paid to employees by the
charitable organization and all its affiliated organizations.
i.
Federal and state tax-exempt status.
j.
Denial at any time by any governmental agency or court of the right to solicit
contributions.
k.
Date on which accounting year of the charitable organization ends.
l.
General purposes for which organized.
m.
General purposes for which contributions to be solicited will be used.
n.
Methods by which solicitation will be made.
o.
Board, group, or individual having final discretion or authority as to the
distribution and use of contributions received.
p.
Amount of total contributions received during the accounting year last ended.
2.
The registration statement filed by a charitable organization must include a
registration fee of twenty-five dollars and a financial statement of the organization's
operation for its most recent twelve-month period immediately preceding the filing of
the first registration statement.
An initial registration filed by a charitable
organization in July or August following the close of the annual reporting period
described in section 50-22-04 is valid until September first of the subsequent year.
The registration continues unless revoked by a court of competent jurisdiction, by
the secretary of state, or as provided in this chapter. If a charitable organization fails
to file a registration statement or other information required to be filed by the
secretary of state under this chapter, or otherwise violates this chapter, the secretary
of state, upon notice by certified mail to its last-known address, may deny or
suspend the application for registration.
An adjudicative proceeding under this
chapter must be conducted in accordance with chapter 28-32 unless otherwise
provided in this chapter. A notice required under this chapter or chapter 28-32 may
be made by certified mail. In the event of revocation, the secretary of state shall
retain the registration fee.
3.
An officer of the charitable organization must execute the registration statement and
must acknowledge that the registration statement has been executed pursuant to
resolution of the board of directors or trustees, or if there be no such board, then by
its managing group which has approved the content of the registration statement.
The executing officer also must certify that the board of directors or trustees, or if
there be no such board, its managing group, have assumed, and will continue to
assume, responsibility for determining matters of policy and have supervised, and
will continue to supervise, the finances of the charitable organization.
4.
If a chapter, branch, area office, or similar affiliate of a charitable organization is
supervised and controlled by a parent organization located within or outside the
state, the affiliate may file a registration statement on behalf of the parent
organization in addition to or as part of its own registration statement or the parent
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organization may file a registration statement on behalf of the affiliate in addition to
or as part of its own registration statement.
50-22-02.1. Registration of professional fundraiser - Bond required.
1.
A person may not act as a professional fundraiser subject to this chapter unless that
person has registered with the secretary of state. The registration statement must
be in writing, under oath, in the form prescribed by the secretary of state and must
be accompanied by a fee of one hundred dollars. The registration information must
be available to the public as a matter of public record. Each registration expires on
September first unless, prior to September first, the public fundraiser registers by
filing a new registration statement, accompanied by a fee of one hundred dollars.
The forms containing the information must be verified under oath and must include
the following:
a.
The name of the professional fundraiser.
b.
The street and mailing address and telephone number of the professional
fundraiser.
c.
The type of fundraising to be conducted in this state.
d.
The name of the auditor, accountant, employee, agent, or other person who
maintains or possesses the professional fundraiser's records.
e.
A list of all officers, agents, or employees to work under the applicant's
direction.
f.
A list of all licensed charitable organizations with which the applicant has
contracts within this state.
2.
The professional fundraiser shall also include, as part of the registration statement, a
bond in which the professional fundraiser is the principal obligor. The bond must be
in the sum of twenty thousand dollars, with one or more responsible sureties whose
liability in the aggregate as the sureties will at least equal that sum. In order to
maintain the registration, the bond must be in effect for the full term of the
registration. The bond, which may be in the form of a rider to a larger blanket liability
bond, must run to the state and to any person who may have a cause of action
against the principal obligor of the bond for any liabilities resulting from the obligor's
conduct of any activities subject to this chapter.
3.
The professional fundraiser shall also include, as part of the registration statement, a
copy of the contract between any charitable organization and the professional
fundraiser. The contract must:
a.
Be in writing;
b.
Contain information that will enable the secretary of state to identify the
services the professional fundraiser is to provide, including whether the
professional fundraiser will at any time have custody of contributions; and
c.
Be submitted within ten days of the date of execution.
4.
A parent organization filing on behalf of one or more chapters, branches, or affiliates
and a federated fundraising organization filing on behalf of its member agencies
shall pay a single annual registration fee for itself and the chapters, branches,
affiliates, or member agencies included in the registration statement.
If any
professional fundraiser fails to file any registration statement or other information
required to be filed by the secretary of state under this chapter or otherwise violates
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this chapter, the secretary of state, upon notice by certified mail to its last-known
address, may deny or suspend the application for registration.
Any adjudicative
proceedings under this chapter must be conducted in accordance with chapter 28-32
unless otherwise specifically herein provided. Any notice required under this chapter
or chapter 28-32 may be made by certified mail.
5.
A professional fundraiser may not solicit on behalf of a charitable organization that is
not registered.
50-22-02.2. Registrant name registration or certificate of authority required. The
secretary of state may not issue or renew a registration provided for in this chapter if the name of
the registrant is an entity whose name is not in some manner registered with the secretary of
state as a corporation, limited liability company, trade name, fictitious name of a partnership,
limited partnership, or limited liability partnership.
For a registrant that is a foreign entity, a
registration under this chapter means the same as a license or permit under section 10-19.1-134,
10-32-137, 10-33-127, or 45-22-19, or other substantially equivalent statute for the purpose of
procuring a certificate of authority or similar authorization to act in this state.
50-22-03. Application for license - Contents. Repealed by S.L. 1999, ch. 425, § 7.
50-22-04. Information required to be filed annually.
1.
Every charitable organization that is required to file or that files a registration
statement pursuant to section 50-22-02 shall file an annual report along with a ten
dollar fee with the secretary of state on or before September first of each year. The
report must be postmarked by the United States postal service or other carrier, in a
properly addressed, postage prepaid, sealed envelope.
The secretary of state may extend the filing date for the annual report of any
charitable organization, if a written application for extension is received before the
filing deadline.
A charitable organization with a fiscal year ending within three
months prior to the filing deadline may make a written request for an extension to
apply to reports for subsequent years until the fiscal year is changed.
Information submitted must be given as of the close of the business on the
thirty-first day of December next preceding the date herein provided for the filing of
the report, or, in the alternative, the date of the end of the fiscal year next preceding
this report may be used.
2.
The annual report must be filed on forms prescribed by the secretary of state and
must include a financial statement covering the immediately preceding twelve-month
period of operation.
An officer of the charitable organization shall execute the
financial statement which must include a balance sheet, statement of income and
expense, and statement of functional expenses. The financial statement must be
filed on or attached to forms furnished by the secretary of state and must be
prepared in accordance with generally accepted accounting principles so as to make
a full disclosure of the following, including necessary allocations between each item
and the basis of the allocations:
a.
Total receipts and total income from all sources;
b.
Cost of management and general;
c.
Program services;
d.
Cost of fundraising;
e.
Cost of public education;
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f.
Funds or properties transferred out of state with explanation as to recipient and
purpose;
g.
Total net amount disbursed or dedicated within this state, broken down into
total amounts disbursed or dedicated for each major purpose, charitable or
otherwise;
h.
Names of professional fundraisers used during the accounting year and the
financial compensation and profit resulting to each professional fundraiser; and
i.
Total compensation, including salaries, fees, bonuses, fringe benefits,
severance payments, and deferred compensation, paid to employees by the
charitable organization and all its affiliated organizations.
3.
Unless otherwise required by this section, the financial statement need not be
certified.
4.
The annual report must include a copy of all tax or information returns, including all
schedules and amendments, submitted by the charitable organization to the internal
revenue service for the period covered by the annual report, except any schedules of
contributors to the organization.
5.
The secretary of state may make a detailed examination of the accounts of any
charitable organization conducting a solicitation for funds within this state. Upon
request the attorney general may assist the secretary of state in carrying out this
chapter. Every charitable organization subject to this chapter shall keep a full and
true record in the form that will enable the charitable organization to accurately
provide the information required by this chapter. The registration of a charitable
organization is ineffective immediately upon its failure to file an annual report,
including the payment of all required fees. Any such organization, if in default under
this chapter, may not file a new registration statement until it files the required
annual report with the secretary of state.
Failure to file the annual report and fee as required will mean the organization may not solicit in
this state.
50-22-04.1.
Limitations on amount of payments for solicitation or funding.
Repealed by S.L. 1985, ch. 531, § 1.
50-22-04.2. Contract or statement filing. Repealed by S.L. 2003, ch. 419, § 9.
50-22-04.3.
Fraud - Misrepresentation.
A charitable organization, professional
fundraiser, or any agent or employee of a charitable organization or professional fundraiser may
not use any deceptive act or practice, fraud, false pretense, false promise, or misrepresentation
with the intent that others rely thereon in connection with the solicitation of a contribution for or on
behalf of a charitable organization.
50-22-05. Enforcement - Penalties - Remedies. Any person conducting a solicitation in
violation of this chapter, or failing to properly complete and file any report required under this
chapter, is guilty of a class A misdemeanor.
Any person conducting a solicitation after the
person's registration is revoked is guilty of a class C felony. The criminal penalties in this section
are in addition to all other causes of action, remedies, and penalties available to the state.
Whenever the attorney general or any state's attorney has reason to believe or is advised
by the secretary of state that the charitable organization or professional fundraiser is operating in
violation of this chapter, the attorney general or state's attorney may bring an action in the name
of the state against the charitable organization and its officers, the professional fundraiser, or any
other person who has violated this chapter or who has participated or is about to participate in
any solicitation or collection by employing any device, scheme, artifice, false representation or
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promise, to defraud or obtain money or other property, to enjoin the charitable organization or
professional fundraiser or other person from continuing the violation, solicitation, or collection, or
engaging therein, or doing any acts in furtherance thereof and for any other relief the court
determines appropriate, including the imposition of civil penalties in the amount of up to five
thousand dollars per violation of this chapter and the denial of registration under this chapter for a
period of up to five years. The attorney general, in enforcing this chapter, has all the powers
provided in this chapter or chapter 51-15 and may seek all remedies in this chapter or chapter
51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are
in addition to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise
provided by law.
50-22-06. Costs recoverable in court proceeding. The attorney general is entitled to
an award of reasonable attorney's fees, costs, and expenses of an investigation and action
brought under this chapter.
50-22-07. Rules. The secretary of state may adopt rules the secretary of state deems
necessary and appropriate to fully implement the provisions of this chapter in accordance with
chapter 28-32, but which need not comply with section 28-32-07.
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