Charitable Giving

Charities and charitable solicitors (paid charitable fundraisers) are governed by the Colorado Charitable Solicitations Act. Information on registration as a charity or as a charitable solicitor is available at the Colorado Secretary of State’s Office. button

Charitable organizations must register with the Colorado Secretary of State before they raise money in this state. Paid charitable solicitors must also register before they can engage in fundraising activities on behalf of a charity. A paid solicitor must file with the Secretary of State a "Notice of Solicitation" at least 15 days prior to commencing a fundraising campaign. The notice must disclose a summary of the governing contract, the full legal name and address of the paid solicitor, the nature of solicitation campaign, the length of the campaign, and the charitable purpose for which the campaign will be conducted. A paid solicitor must file a financial report detailing gross proceeds of each campaign and all expenses or disbursements paid by the campaign.

Here are some important tips on charitable giving:

  • If a solicitor calls you: Ask for their registration number AND the registration number of the charity they are representing. This will help you investigate the charity with the Secretary of State.
  • Ask every solicitor: "How much of my donation will actually go to the charitable organization?" If you think the amount is too low, tell them "No thank you."
  • Ask every solicitor and charity: "Is my contribution tax deductible?" Charities must indicate their tax-exempt status in their registration statements. Tax exempt does not necessarily mean that contributions are tax deductible.
  • Check out the charity before you give, particularly if you are unfamiliar with it. You can check legitimate charities out with the Secretary of State’s Office online or go to the Better Business Bureau’s Wise Giving Alliance.
  • Don't be swayed by strong emotional appeals -- take some time to examine the charity's claims and to consider alternatives.
  • Don't be pressured to make an immediate decision – Be suspicious if the solicitor insists upon an immediate donation or offers to send a courier to pick up your contribution. Take time to check any charity before giving.

Oversight of Charitable Organizations by the Attorney General

 Over the past two hundred years, state attorneys general in the United States have exercised broad common law powers to oversee charitable organizations. The Colorado General Assembly has statutorily recognized that the Colorado Attorney General should continue to exercise such broad authority. C.R.S. §24-31-101(5) provides:”The general assembly hereby recognizes and reaffirms that the attorney general has all powers conferred by statute, and by the common law regarding all trusts established for charitable, educational, religious or benevolent purposes.”

The Colorado Supreme Court has confirmed in several cases that the attorney general represents the state as parens patriae and under the common law can intervene to ensure that the terms and intent of charitable trusts are implemented. In Re: Nicholson’s Estate 104 Colo. 561, 93 P2d 880 (1939). Over the years the Colorado Attorney General has investigated diversions of charitable funds from their intended purposes, self dealing by directors or officers, loss of charitable assets through speculative investments, excessive salaries and expenditures paid by charities, and inappropriate loans to officers and directors. The office has sought a variety of remedies including injunctive relief, restitution, and removal of directors and officers and appointment of successors.

The Colorado courts have also made it clear that the common law doctrine of cy pres applies in Colorado, In Re: State of Vallery 883 P2d 24 (1993), and that the Colorado Attorney General has a role to play in its implementation. Cy pres is a French term which means “as near as.” Under the doctrine of cy pres, when a charitable gift is made by will or trust and the named recipient does not exist, has been dissolved, or it has become impossible or impractical to conduct the activity for which the gift is made, the court is allowed to amend the terms of the gift in a way which comes closest to fulfilling the initial intent of the donor. The Attorney General can intervene to ensure equity and fairness in such matters or can be asked by the courts to intervene, conduct investigations, or make recommendations to the court as to where the funds should be directed.

In Colorado, the Attorney General also has specific statutory powers granted by the General Assembly in regard to various non-profits. Under C.R.S. §7-134-301 et seq. the Attorney General has the power to bring an action in district court seeking the dissolution of a non-profit corporation if the articles of incorporation were obtained through fraud, or the non-profit is exceeding or abusing its authority conferred upon it by law.

C.R.S. §6-19-101 to 407 requires the Colorado Attorney General to review and assess any transaction involving the sale, transfer, lease, or other disposition of fifty percent or more of the assets of any hospital in the State of Colorado. The review and assessment is somewhat different if it is a non-profit to a non-profit or a for-profit to for-profit transaction. But in the case of a transfer of assets of a non-profit to a for-profit, the review and assessment that is required is very vigorous. The transaction must be determined to be in the public interest and that requires that all proceeds from a fair market sale be dedicated to charitable purposes. To ensure that this is done properly, the Attorney General has the power to subpoena documents, file lawsuits, hold public hearings, and do what is necessary to carry out the review and assessment.

The Colorado Charitable Solicitations Act, C.R.S. §6-16-101 to 113, requires registration, maintenance of records and annual filings with the Colorado Secretary of State for any non-profit soliciting contributions in the state. It also prohibits deception in solicitations. Violations of the act can be misdemeanors or felonies and the Colorado Attorney General has jurisdiction to enforce the Act criminally and civilly.

Most private foundations in Colorado are required by I.R.S. regulations to file a hard copy of their annual Form 990-PF with the Colorado Attorney General’s Office.

Principles & Practices for Nonprofit Excellence in Colorado