Donor Frequently Asked Questions
The following is designed to answer common questions you may have regarding charitable organizations and to provide information to assist you with personal giving decisions.
- What is a "Charitable Organization"?
- How can I check out a charity?
- How can I check out a professional fundraiser?
- How can I tell if a charitable organization is legitimate?
- What percentage of its contributions should a charitable organization use for its charitable purpose?
- I want to donate my car/boat to a charitable organization. Can you tell me if this car donation group I found on the internet is legitimate?
- I was asked to donate to a fund for a specific individual or family. How do I make sure it's legitimate?
- What is the difference between a Nonprofit Organization and a Charitable Organization?
- What is the difference between a charitable organization and 501(c)(3) status?
- What is the difference between "Tax Exempt" and "Tax Deductible"?
- Who must register as a Wisconsin charitable organization?
- Do all states require charitable organizations to register?
- Why is registration required?
- What is a professional fundraiser?
What is a "Charitable Organization"?
A charitable organization is anyone who is or purports to be established for a charitable purpose or is exempt from taxation under section 501(c)(3) of the Internal Revenue Code.
How can I check out a charity?
You can find the current status of registered charitable organizations and key financial information for most registered charitable organizations by doing a Search on our database. There are also many online resources you can use to check out a charity. Visit the Online Resources on our website to find links to some of these resources.
How To Quickly Research Wisconsin Charitable Organizations
How can I check out a professional fundraiser?
Professional fundraisers that solicit contributions in Wisconsin are required to be registered with our department. You can find the current status of a registered charitable organization by doing a Search on our database.
How can I tell if a charitable organization is legitimate?
Registration with our department does not address an organization's legitimacy. However, you will be able to find information on our website about how registered charitable organizations use the contributions they receive (click here to search for the organization you are interested in and then click on the "Financials" tab). The information available on our website, combined with the information provided by various other Online Resources, will help you make an informed decision about what groups you want to donate to.
What percentage of its contributions should a charitable organization use for its charitable purpose?
Wisconsin statutes don't provide an acceptable or minimum percentage that must be used towards an organization's charitable purpose. This means it is up to you to decide if you approve of the way the charity is using the contributions it receives. You can obtain information about an organization's total contributions, program service expenses (the amount spent on its charitable purpose), management expenses, and fundraising expenses from our website. There are also many other Online Resources you can use to investigate a charity.
I want to donate my car/boat to a charitable organization. Can you tell me if this car donation group I found on the internet is legitimate?
The organization in which you are interested may be registered in Wisconsin, but if it doesn't actively solicit in Wisconsin, it would not need to be registered. There are also some car donation groups that may have claimed a religious exemption from our registration requirements. You can find out if an organization is registered by looking them up on our website.
Please be aware that many charities have subcontracted with a third party towing company and it is this company that actually takes the car and either sells it or auctions it off. In some instances, the charity receives a flat fee per car donation, not the value or sales proceeds of the car you donate. Check with the particular charity to which you intend to donate to learn the details of their car donation program. You may also want to read IRS Publication 4303, A Donors Guide to Vehicle Donations, before you donate your vehicle to a charitable organization.
I was asked to donate to a fund for a specific individual or family. How do I make sure it's legitimate?
Appeals for money that will benefit a specific individual or family are typically considered private gifts, not charitable donations, and often, the person making the appeal does not need to be registered with our department. You should ask if there is a trust or deposit account set up for the individual or family. You can contact the banking institution to verify the existence of the account and check with local sources of information to confirm that there really is a need for such donations. When you decide to contribute to an individual or family, do not give cash. Write a check that is payable to the fund, not to an individual.
What is the difference between a Nonprofit Organization and a Charitable Organization?
A nonprofit organization is an entity recognized by the state of Wisconsin when "Nonprofit Articles of Incorporation" are filed with the Division of Corporate and Consumer Services of the Department of Financial Institutions. A charitable organization is any individual or entity (regardless of corporate status) that solicits contributions in Wisconsin in order to support its charitable purpose.
What is the difference between a charitable organization and 501(c)(3) status?
A charitable organization in Wisconsin is any entity that solicits contributions from the public where the contribution is, or is said to be, used to support the organization's charitable purpose. 501(c)(3) is a federal tax exempt status granted by the IRS. Many organizations that hold a charitable organization credential in Wisconsin are also 501(c)(3) organizations.
What is the difference between "Tax Exempt" and "Tax Deductible"?
"Tax exempt" refers to the organization's own tax status (i.e. whether it pays income taxes), while "tax deductible" means you can deduct your contribution on your federal income tax return. Just because an organization is "tax exempt" does not mean contributions to it are "tax deductible." Contributions to organizations recognized by the IRS as tax exempt under section 501(c)(3) of the Internal Revenue Code are generally tax deductible. If making a tax-deductible contribution is important to you, obtain a receipt showing the name of the organization, the amount of the contribution, and a statement that the contribution is tax deductible.
Who must register as a Wisconsin charitable organization?
In most cases, a charitable organization may not solicit contributions in Wisconsin or have contributions solicited in Wisconsin on its behalf unless it is registered as a charitable organization with the Wisconsin Department of Financial Institutions. This includes organizations located outside of Wisconsin that solicit Wisconsin residents.
While most charities are required to register, there are some activities that are exempt from the state registration requirements. The following are examples of organizations that are NOT required to register. If you would like more information pertaining to a particular exemption, please contact our department.
- Religious organizations that don't file IRS form 990.
- Candidates for national, state or local office or a political party or other committee or group required to file financial information with the federal elections commission.
- Charitable organizations that don't intend to receive contributions in excess of $25,000 during a fiscal year if all of its functions are performed by persons who are unpaid.
- Fraternal, civic, benevolent, patriotic or social organizations that only solicit contribution from their own membership.
- Veterans' organizations incorporated under Wis. Stats. Ch. 188, or chartered under federal law or the service foundation of a veteran's organization.
- Nonprofit, postsecondary educational institutions accredited by a regional accrediting agency.
- A person soliciting contributions for the relief of a named individual and all contributions, without any deductions, will be given to the named individual.
- A state agency or local government unit.
- A private school as defined in s. 118.165, Wis. Stats.
Why is registration required?
Information that charitable organizations provide to the state is made available to the public so any potential donor can learn more about how their contribution will be used by the organization conducting the fundraising campaign. You can find this information by looking up the organization you are interested in on our website.
What is a professional fundraiser?
A professional fundraiser is an independent third party that in exchange for compensation, conducts fundraising activities for a charitable organization. It is not unusual for commercial fundraisers to be hired by, and paid for, their fundraising services by multiple charitable organizations.