Author: Patrick Dunleavey, Principal, CironeFriedberg, LLP
Back in December 2013, Governor Cuomo signed into law the Nonprofit Revitalization Act of 2013. That Act contained many welcome changes for nonprofit organizations, and elements of the law eased the burdens relating to certain major corporate transactions, such as mergers. One of the welcome changes was the increase over time of the audit threshold required with the NYS Annual Filing for Charitable Organizations Form CHAR500 (CHAR500) to $1 million.
Beginning on July 1, 2021, the current audit threshold of $750,000 of revenue and support will increase to $1 million. Organizations whose CHAR500 have an original or extended due date that falls after July 1, 2021 will be able to take advantage of the new audit threshold. An independent accountant’s review report is required if the organization has revenue between $250,000 and $1 million.
In addition to this change, charitable and social welfare organizations that are registered to solicit funds in New York under Article 7-A of the New York Executive Law and have gross revenue exceeding $250,000 must now file their annual CHAR500 financial report with the New York Department of Law and the New York Department of State. Previously, the CHAR500 was filed only with the New York Department of Law (more specifically, with the Attorney General’s Charities Bureau). These reports are due the fifteenth day of the fifth month after the organization’s fiscal year end, with extensions available for up to 180 days (mirroring the filing schedule for the IRS Form 990).
Also, as part of the new financial report requirement for the New York Department of State, a mission statement must now also be submitted and the statement must be consistent with what was or would be provided to the IRS with an application for recognition of tax exemption as a 501(c) organization.
Finally, the new financial report requirement clarifies that CHAR500 filers must file a copy of the organization’s “complete IRS Form 990 with schedules.” Under New York state law, the Schedule B and the names and addresses of donors disclosed in reports, including donors listed on Schedule B, are not subject to public disclosure, but must be included with the CHAR-500.
About the Author
Patrick Dunleavey, CPA, specializes in providing audit services for not-for-profit organizations, including arts and cultural organizations and human services agencies and, manufacturing and distribution organizations. Contact Patrick at pdunleavey@cironefriedberg.com and connect with him on LinkedIn.
If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford), or email us at info@cironefriedberg.com.
