Q:       How does the Ohio Charitable Trust Act affect me?

A:        The Ohio Charitable Trust Act gives authority to the Ohio Attorney General to oversee charitable organizations.  Under this law, the Attorney General can investigate charities to ensure they are being operated appropriately, their assets are used properly and their donors and beneficiaries are protected.  Every Ohio charity must meet certain obligations under the Charitable Trust Act in addition to following IRS rules.

Q:       I am starting a charitable organization. What are my obligations under the Charitable Trust Act?

A:        Charitable organizations have registration and reporting obligations.  They must register one time with the Attorney General’s office, a straightforward process that must be completed online at www.ohioattorneygeneral.gov/charitableregistration.  The Attorney General’s website resources will guide you through the process.  You will need to provide basic information including the charity’s  address, taxpayer identification number, date of formation, state charter number, bingo license number (if you have one), description and value of assets and copies of your organizational documents (articles of incorporation, federal tax exemption letter, bylaws, etc.).

Once you create an online account and register, you must file a report with the Ohio Attorney General each year.  This report is in addition to the Form 990 you may file with the IRS, but asks for much of the same information and is due at the same time each year. 

Q:       Are there fees involved in registration and reporting?

A:        There is no cost to create an online account and register with the Attorney General’s office, but a fee is due at the time you file your annual report.  The fee varies based on your assets and ranges from $50 for small organizations up to $200 for large organizations.

Q:       Must every Ohio charity register and file reports?

A:        Certain organizations are exempt from registration and reporting.  These include schools, churches and booster clubs or PTAs with less than $25,000 in assets and gross receipts. If you are not sure if you are exempt, ask the Attorney General’s office or request an exemption through the online system.

Q:       Exactly how does the Attorney General get involved with charities?

A:        The Charitable Trust Act allows the Attorney General to investigate a charity when board members, key staff or officers fail to meet their fiduciary duties and donors or beneficiary interests are threatened.  The Attorney General’s office also offers educational resources to help those involved with charities understand their duties and obligations.   

Q:       What are fiduciary duties and who has them?

A:       The Ohio Attorney General recognizes four fiduciary duties that must be followed by anyone in a position of authority with a charitable organization (including board members, officers and senior staff):

1)    Duty of Loyalty – you must put the interests of the charity first and avoid conflicts of interest;

2)    Duty of Care – you must be active in the governance of the charity and understand its mission and programs;

3)    Duty of Compliance – you must confirm the charity follows the law and meets its legal obligations of registration, reporting and filing tax forms;

4)    Duty to Manage Accounts – you must ensure the charity makes sound financial decisions and has responsible fiscal policies in place.

Q:       What educational resources does the Ohio Attorney General’s office provide for charities?

A:        The Attorney General offers resources through its website at www.ohioattorneygeneral.gov/Business/Services-for-Charities.  These materials explain fiduciary duties, help you avoid theft in your organization and clarify registration and reporting obligations.  The Attorney General’s office also publishes a newsletter and hosts webinars to discuss obligations and duties under the Charitable Trust Act.  You can also ask someone from the Attorney General’s office to provide in-person trainings in your community by calling 800-282-0515.

            The Attorney General also provides information for those wishing to donate to charitable organizations.  You can research specific charities through the website and can find “good giving” articles and brochures to help you make informed decisions about making contributions. You can find this information at www.ohioattorneygeneral.gov/Business-and-Non-Profits/Charity/Good-Giving.aspx.

Q:       What if my charity solicits donations or runs bingo games?

A:        In addition to its duties according to the Ohio Charitable Trust Act, the Attorney General regulates charitable solicitations through the Ohio Solicitations Act. Many charities hire professional fundraisers and solicitors to help them raise money. In Ohio, these professional fundraisers must be licensed and follow certain laws found at www.ohioattorneygeneral.gov/Business/Professional-Solicitors-and-Fundraisers.

            If you host bingo games to raise funds for your charity, you must comply with bingo license laws.  Learn more through the Attorney General’s “Bingo School” and online at www.ohioattorneygeneral.gov/Business-and-Non-Profits/Bingo-Operator.aspx.

This “Law You Can Use” consumer legal information column was provided by the Ohio State Bar Association (OSBA). It was prepared by attorney Mary Gallagher of the Ohio Hospital Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek the advice of a licensed attorney.

Q:       My elderly mother receives a lot of phone calls from professional solicitors asking her to make donations to charities all across the country. Some are groups we have never heard of before. Her number is on the National Do Not Call Registry. How can I get these phone calls to stop?

A:        Many people are surprised to learn that the Do Not Call Registry does not apply to charitable fundraising. Registering your home telephone number with the National Do Not Call Registry will not prevent charities from contacting you. However, charities must keep a record of people who have asked not to be contacted again, so you can ask not to be contacted in the future. Charities also must honor Do Not Call requests sent in writing.

Q:       Does Ohio law regulate professional solicitors who are hired to raise money for charitable organizations?

A:        Ohio law requires such solicitors to identify themselves clearly as professional solicitors and state the name of their firm as well as the specific charity they’re representing at the beginning of each call.

Q:       If I ask to be placed on a Do Not Call list during a call from a solicitor hired by a charitable organization, will my request be honored?

A:        If, during the call, you ask to be placed on a Do Not Call list, your request must be honored whether the caller is a staff member, volunteer or solicitor for that charity. Given the number and the variety of lists being worked, removal of your name might take a few weeks. Solicitors must relay your request to the charity and then the charity is responsible for sharing the information with any other solicitors it might hire.

Q:       Can I ask to have my name removed from more than one charity at the same time?

A:        No; there is no way to remove your name from the lists of multiple charities simultaneously. In other words, there is no legal requirement for a professional solicitor to remove your name from the lists of all the charities he or she may represent.

Q:       Are professional solicitors regulated by Ohio law?

A:        Yes. Professional solicitors and charities asking for donations must meet a number of legal requirements and, of course, are prohibited from misrepresenting themselves or their intentions. For example, some solicitors may try to intimidate the elderly by using aggressive tactics, falsely claiming the consumer pledged or gave a gift previously, or using names that sound similar to those of other well-known organizations.

Q:       Are there things I should be aware of when dealing with donation requests?

A:        Always be wary of sharing bank, credit card or other personal information with an unknown or uninvited caller. Scammers are always looking for opportunities to steal financial data or even identities.

            Also, it’s also a good idea to ask questions or request written information before donating. If a solicitor calls claiming to represent a particular charity, find out how much of your donation the charity will actually receive. Contact the charity directly and confirm that a fund-raising campaign is underway. See if family members or friends are familiar with the charity’s work and whether it’s a solid, reputable organization. Review online evaluations of charities from watchdog groups at sites such as www.charitynavigator.org, www.charitywatch.org, and www.bbb.org/us/charity/. You can also see a charity’s 990 return filed annually with the Internal Revenue Service at www.guidestar.org.

Finally, it’s wise to prepare a giving plan that identifies the causes and charities you choose to support. By approaching charitable giving in a thoughtful, organized fashion, you’ll be prepared to make decisions in line with your priorities when you receive requests for donations.

Q:       What can I do if I have concerns about charitable organization solicitations?

A:        If you have concerns about charitable solicitations, please contact the Ohio Attorney General’s Office or file a complaint by calling 800-282-0512 or by visiting www.OhioAttorneyGeneral.gov.

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by Beth Short, who is part of the Ohio Attorney General’s Charitable Law Section. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       I was just asked to serve on the board of a local charity that I have been supporting for years because of its great services. What should I know?

A:        Serving on the board of a charitable organization enables the staffs, volunteers and charity donors across the state to enhance the quality of life in all our communities. The job is demanding, but also rewarding, and is a vital function.

Becoming a board member for a charitable organization means more than merely accepting an honorary title or helping a charity that contributes positively to the lives of people in the community. When you become board member, you will be taking on an important job with specific legal responsibilities.
           

Q:       What specific legal responsibilities would I have?

A:        As a board member, you would have four basic obligations to the charity you serve: duty of care, duty of loyalty, duty of compliance, and duty to maintain accounts and records. Observing these duties requires you to pay attention, ask questions and take your role seriously. Your top priority as a board member is to keep faith with donors and stakeholders, ensuring that the organization is able to honor and perform its mission now and in the future. 

            Board members are the first line of defense for ensuring the integrity of charitable organizations and the entire philanthropic sector. They are legally bound to make certain all designated resources are used effectively and efficiently for the implementation of an organization’s mission and not for anyone’s personal benefit. Only an active board that routinely develops and evaluates programs and policies having to do with day-to-day operations in the organization can successfully meet that obligation.

Q:       What questions should I ask before agreeing to serve on a board?

A:        You should ask how the board operates, whether job descriptions are available and what you will be expected to do. Examine past board meeting minutes, financial reports, by-laws and policies. Find out whether the charity carries liability insurance for its directors and board members. Ask to see the organization’s annual filings with the IRS and the Ohio Attorney General’s Office. The contents of these documents—or the lack of documentation—could signal potential problems or indicate how much work must be undertaken to properly establish and operate a governance structure for the organization.

Q:       Where can I get help to meet my legal responsibilities as a board member?

A:        The Ohio Attorney General’s Office regulates charitable organizations and assists board members with meeting their responsibilities. Board governance training and related materials are among the resources available at www.OhioAttorneyGeneral.gov to help new leaders of charities. Also, questions about training and resources for charitable board service and charitable fundraising can be emailed to CharitableLaw@OhioAttorneyGeneral.gov.

            Publicized incidents of theft, embezzlement and other fraudulent activities have damaged the reputations—sometimes permanently—of a number of charitable organizations. Many such incidents could have been avoided had board members put in place policies and processes that uncovered wrongdoing more quickly or prevented it altogether. Donors and stakeholders deserve the assurance that gifts and resources are properly protected and utilized.

Q:       Does the Ohio Attorney General’s Office investigate charitable organizations when wrongdoing is suspected?

A:        Yes. The Ohio Attorney General’s Charitable Law Section regularly receives complaints about lax controls and misuse of funds at charities. It launches investigations when problems are suspected or discovered, and the office has broad authority to take action to protect or recover charitable assets. Board members who scheme to defraud donors or charities may face civil as well as criminal actions to recover lost resources. Complaints can be filed online at www.OhioAttorneyGeneral.gov, mailed to the Charitable Law Section at 150 E. Gay St., Columbus, OH  43215, or people can call 1-800-282-0515 to report any suspicious charities or solicitations.

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by Beth Short, who is part of the Ohio Attorney General’s Charitable Law Section. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.