New York recently adopted regulations impacting charitable organizations that are registered and required to file annual financial reports (the CHAR 500) with the New York Attorney General’s Charities Bureau.[1] These regulations, which became effective March 16, 2022, clarify that the names and street addresses of donors to public charities are no longer required to be disclosed to the Charities Bureau with the CHAR 500.

The regulations were proposed in response to the U.S. Supreme Court’s 2021 decision in Americans for Prosperity Foundation v. Bonta, which found California’s donor disclosure law requiring charities to submit an unredacted copy of IRS Form 990 Schedule B to be unconstitutional under the First Amendment. Following the Court’s decision, California, New York, and New Jersey suspended collection of Schedule B donor information, which is typically filed on a confidential basis with the IRS as part of the otherwise public Form 990. Six months later, the New York Attorney General’s Office proposed regulations to eliminate the requirement that charitable organizations provide the state with the names and addresses of donors on Schedule B. The final regulations remain unchanged from those proposed by the AG’s Office.[2]

Under the regulations, private foundations required to file a CHAR 500 must continue to provide the Charities Bureau with the foundation’s complete, unredacted Schedule B. Public charities and, according to the Charities Bureau, all other CHAR 500 filers (e.g., 501(c)(4) organizations) that file Schedule B with the IRS must file either:

  • a redacted Schedule B without the names and street addresses of the donors but including the amounts of donations and the states from which those donations were received during the reporting period, or
  • a statement of the gross amount of contributions received during the reporting period from individuals and entities residing or domiciled in New York.

Organizations that do not file Schedule B with the IRS will be required to provide the gross amount of contributions received from New York donors during the reporting period.

Information on the gross amount of contributions from New York persons will be reported by selecting from a series of dollar ranges in the online filing system. The Charities Bureau anticipates completing updates to the online filing system to allow filers to provide the information required by the regulations in June 2022. The Charities Bureau has stated the new information will not be required until the system is updated. Reminder: For organizations operating on a calendar year fiscal year, the CHAR 500 covering the prior fiscal year will be due on May 15.

The regulations also make a few additional changes to the following:

  • One Million Dollar ($1,000,000) Audit Threshold: In July 2021, the Charities Bureau increased the threshold amount of gross revenue required to submit an audit with the CHAR 500 from more than $750,000 to more than $1,000,000. The regulations clarify that the new audit threshold applies to organizations with a fiscal year that began on or after July 1, 2021. There is a limited one-time waiver of the audit requirement for a 2020 annual filing that is accompanied by a CPA’s review report if the organization budgeted or paid for a review report in reliance on previous guidance from the Charities Bureau.[3] For organizations that qualify, waiver requests must be submitted in writing by June 16, 2022.
  • Extension of Time to File: The regulations clarify that all registered organizations are entitled to an automatic six-month extension of time to file CHAR 500 and do not need to apply for an extension request.

Separately, New York Governor Kathy Hochul signed S4817 into law on November 12, 2021, which eliminated the duplicative filing requirement that a registered charitable organization file its CHAR 500 with both the Charities Bureau and the New York Department of State. This duplicative requirement went into effect in January 2021 and lasted less than a year. Registered organizations should continue to file their CHAR 500 with the Charities Bureau only.

[1] The regulations amend Section 91.5 of Title 13 of the New York Codes, Rules and Regulations.

[2] The proposed regulations were published on December 1, 2021. See New York State Register, pp. 21-23. The notice of adoption was published on March 16, 2022, noting that there were no changes to the final rule from the proposed rule. See New York State Register, pp. 19-20.

[3] In 2018, the Charities Bureau issued guidance that the increased threshold would apply to “annual reports with an original or extended due date after July 1, 2021.” The regulations clarify that the threshold applies for organizations whose “fiscal year began on or after July 1, 2021.” Therefore, the regulations clarify that the one million dollar audit requirement is based on an organization’s fiscal year and not on the due date of the annual CHAR 500.