The Florida Solicitation of Contributions Act (the “Act”) requires anyone who solicits donations, i.e., charitable organizations, sponsors, professional solicitors and fundraising consultants, to register with the Florida Department of Agriculture and Consumer Affairs (the “DACA”). Recent amendments to the Act have added some additional administrative and reporting requirements which became effective July 1, 2014.
A few important changes for charitable organizations to note include:
1. Charitable organizations must report changes to their registration statement within 10 days. Examples of changes include: (i) anything related to the organization’s registration statement, including activities in other states; or (ii) criminal, administrative, or other actions against the organization. Failure to disclose this information within the 10 day window will result in automatic suspension of the organization, until such time that the information is submitted.
2. Organizations are required to adopt a conflict of interest policy. This is intended to cover transactions between the organization and any party in which an officer, director, or trustee has a direct or indirect financial interest. This certification must be submitted along with the organization’s annual registration statement, and must contain a certification of compliance from each of the organizations officers, directors, and trustees.
3. In regards to the filing of the organization’s annual financial statement, the following brackets have been established by the recent amendment.
a. Annual contributions of less than $500,000
i. An audit, review or compilation of the financial statement is optional.
b. Annual contributions between $500,000 and $1 million
i. The financial statement must be audited or reviewed by an independent certified public accounting firm.
c. Annual contributions of $1 million and greater
i. The financial statement must be audited by an independent certified accountant firm.
4. All charitable organizations that have more than $1 million in total revenue and spend less than 25% of their total function expenses on program service costs must file supplemental information. This supplemental information should include the names and specific sums paid to all: (i) employees or consultants that were paid more than $100,000 during the preceding fiscal year; and (ii) service providers that were paid more than $100,000 during the preceding fiscal year (a description of the services provided must be included).
These organizations must also provide: (i) total salaries of all persons employed by the charitable organization; (ii) fundraising amounts paid to professional solicitors, and contributions received from professional solicitors; (iii) travel expenses; and (iv) overhead and other expenses related to managing and administering the charitable organization.
5. If the charitable organization uses collection receptacles for donated items, a permanent sign must be displayed on each sign of the receptacle, including: name of the organization, business address, telephone number, and the DACA registration number.
6. All written and website solicitation must include the following statement:
A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING TOLL-FREE WITHIN THE STATE. REGISTRATION DOES NOT IMPLY ENDORSEMENT, APPROVAL, OR RECOMMENDATION BY THE STATE.
The statement must also include a toll-free number for the DACA, along with the website for the DACA.
7. Failure to comply with the Act may lead to a cease and desist order, and/or monetary penalties ranging from $5,000 to $10,000.
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