Gephardt: Important State Rules New Charities Need To Know
SALT LAKE CITY, Utah – The owner of the Chantel Lauren bridal shop in Salt Lake City’s Maven District is selling less formal attire these days. T-shirts and hats that say “support the small” can be purchased from SupportTheSmall.com and Chantelle Galloway said it’s for a good cause.
“Those goods or donations are going to go to help small businesses who need help with operating costs during this pandemic,” she said. “Our hope is that we can grow this fundraiser bigger and help more companies.”
It is a noble idea and she is not alone foraying for the first time into charitable fundraising. Since COVID-19 struck, we have seen money being raised to help those in need of everything from food to personal protection equipment.
The director of Utah’s Division of Consumer Protection said his department applauds the efforts. Still, Daniel O’Bannon said there are rules and not everyone follows them.
“The key rule, number one, (is) register with the Division of Consumer Protection,” he said. “If you’re going to raise money as a charity, you need to be on file so the public can see who you are. And what you’re about.”
It also allows the state to track down a charity’s owner if anything goes sideways.
The state application is 20 pages long and comes with a $250 fee. It can take “up to 20 business days to review and process an application,” according to DCP’s website. “You may expedite this process 2 – 3 business days by paying a $75 expedited fee.”
Playing around on the website, the KSL Investigators found it to be fairly straightforward, albeit cumbersome.
O’Bannon said it’s the law and for good reason.
“The rules are there because for every effort there is to do something good, there’s also scammers who try and take advantage of that same sentiment to line their own pockets,” he said.
A charitable organization is defined by the Charitable Solicitations Act – and it is broad.
Any person or group that claims they are philanthropic, raising money for any “charitable purpose” must be registered with the state. That includes folks raising money on popular crowdfunding websites like GoFundMe, O’Bannon said.
One exception to the rule is if 100% of the money goes to a charity that is already registered, O’Bannon said. For example, if you are collecting cans for the Utah Food Bank, you do not have to register yourself.
Breaking the rules could result in anything from a warning to a citation – or even criminal charges in situations where state officials believe someone is committing fraud.
Chantelle said she had no idea about all the regulations when she came up with the idea of Support The Small and she’s guessing other well-meaning people don’t either.
“It’s a little bit overwhelming,” she said.
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