Florida Imposes Strict Penalties for Lapsed Registrations

September 2010

Florida has begun issuing a $500 fine upon any nonprofit organization that has solicited Florida residents during any period in which its registration or 60-day extension has expired. Officials from the Florida Department of Agriculture and Consumer Services have begun calling organizations approximately one week after their registration or extension period has expired to inquire whether solicitation activity occurred during the non-registered period. Organizations that answer yes will automatically be fined $500 and be required to sign a consent agreement. Organizations that answer no may be required to submit a statement or affidavit confirming this fact.

Florida strictly enforces its 60-day extension, which is obtained by a written request. No additional extensions are allowed. Organizations that cannot complete their renewal submissions before the extension expires (e.g., because their financial reports are not yet completed) may want to temporarily suspend all solicitation activity to Florida residents until registration/renewal status is confirmed. If the decision is made to suspend solicitations, organizations should ensure that this suspension is communicated to all of their fundraising vendors prior to the expiration of their registration or extension.

However, there is an alternative. In the event an organization’s financial reports are not ready by the expiration of the registration or extension periods, the organization may alternatively satisfy the registration requirement by completing the state financial form (“Statement of Support/Revenue and Expenses”) using estimated numbers. This form is included in the registration renewal packet sent by Perlman and Perlman to all of our nonprofit registrations clients. The final Form 990 must then be submitted once it becomes available.

Please be aware: An executed consent agreement can have a significant negative impact on other registration requirements nationally. Once the organization signs a consent agreement acknowledging that it has solicited in Florida during a non-registered period, the consent agreement must be disclosed annually when renewing registration in many other states. Failure to disclose consent agreements or any other disciplinary action by other states can lead to further penalties, including requiring a consent agreement to be signed for failing to disclose those disciplinary actions.

In today’s challenging economic climate, many state agencies are looking for new ways to raise or collect additional state revenue by imposing fines and sanctions for violations, even when they are inadvertent. It is more critical than ever that nonprofits and fundraising professionals ensure they remain compliant with all applicable solicitation regulations.

If you have any questions regarding this matter, please contact Cynthia Mercado at Cynthia@perlmanandperlman.com or Karen Wu at Karen@perlmanandperlman.com.