Governor Rell Signs Bill Regulating Charitable Funds

Governor M. Jodi Rell today signed into law a bill that helps smaller charities keep more of the money they raise by eliminating the requirement for an audit while ensuring that they are still subject to state oversight. The bill also regulates to a greater degree charities that use paid solicitors.

The new law raises the threshold for the requirement that a charity’s annual report be audited -- from $200,000 to $500,000 -- but requires all charitable organizations to register and file annual reports with the Department of Consumer Protection.  It also changes the definition of “paid solicitor” to include a person who solicits contributions for “consideration” – such as goods or services – rather than compensation.

“This bill provides financial relief to smaller charities and helps to ensure that more of the dollars raised are spent on the charity itself rather than on a costly audit,” Governor Rell said.  “It also provides for greater regulation of charities that use paid solicitors by now including those who raise funds in exchange for gifts rather than cash.”

The bill also allows the Commissioner of Consumer Protection to reduce or waive late fees and to waive audit requirements.

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Courtesy of Governor Rell's Office -- Click here for the original release

Note from CT Nonprofits:

It is estimated that the impact of this legislation may save up to 500 nonprofit organizations as much as $3 million annually. While CT Nonprofits introduced legislation as did the Attorney General, the bill enjoyed universal support from the Society of Certified Public Accountants, the legal community and the Connecticut Council For Philanthropy. Please note that certain funders may still require an audit or a review of an organization’s finances.

The Governor asked CT Nonprofits to be represented at a bill signing on Tuesday, June 16, 2009. Jennifer Yanko, Managing Director of Hartbeat Ensemble in Hartford, represented Connecticut Nonprofits at the Capitol ceremony.