Oklahoma non-profit entities subject to new requirements

Effective November 1, 2023, many Oklahoma non-profit entities are subject to new requirements that may have far-reaching and unexpected effects.  This little known new law requires that many Oklahoma based religious, charitable and educational non-profits give notice to the Oklahoma Attorney General forty-five days prior to certain events or transactions.  These provisions create a new level of scrutiny to certain transactions by charities that is not applicable to private business in Oklahoma.  

What Non-Profits are subject to this new law?

This law applies to a charitable organization that:

·        Is incorporated, organized, or has its principal place of business in Oklahoma, or has assets located in this state with a fair market value in excess of Five Hundred Thousand Dollars ($500,000.00); and

·        Has engaged in solicitation of contributions in Oklahoma for a period of one (1) year.

What is the new reporting requirement?

A charitable organization required to register to make charitable solicitations in Oklahoma under the Oklahoma Solicitation of Charitable Contributions Act (a “Registerable Entity”) must now give written notice to the Attorney General no later than forty-five (45) days before any of the following events:

·        Dissolution of the charitable organization;

·        Termination of the charitable organization;

·        Disposition by the charitable organization of all or substantially all of the charitable assets of the charitable organization;

·        Removal of the charitable organization from the jurisdiction of this state;

·        Removal of all or substantially all charitable assets of the charitable organization from this state;

·        An amendment of the governing document that describes the charitable purposes of the charitable organization and the use and administration of charitable assets held by the charitable organization; or

A grant or other donation by a charitable organization in the ordinary course of its operation and consistent with its past practice is not reportable under this law.

Additionally, such Registerable Entities must give written notice to the Attorney General no later than forty-five days before the consummation of a merger, consolidation, or conversion of the charitable organization.

What is the review process by the Attorney General?

The new law states that a transfer of a charitable asset in connection with an event which requires the notice filing with the Attorney General and which occurs earlier than forty-five (45) days after giving the notice violates this law unless before the transfer, the charitable organization receives written consent from the Attorney General to the event or written notice from the Attorney General that the Attorney General will take no action related to the event.

In reviewing any event for which notice is required the Attorney General is to consider, among other relevant factors as determined by the Attorney General, the value of the assets or interests transferred, the person or entity to which such transfer is made, the purpose of the transfer, the source of the assets, whether the assets consist of donated funds or property, the donors' intent to the extent it can be determined, and any expression of support by the board of directors and the voting members of the charitable organization that proposes to make the transfer.

If the Attorney General objects to any event for which notice is required, the Attorney General shall give written notice to the charitable organization of the objection. Either the Attorney General or the charitable organization may file an action with the district court of the county in which the charitable organization is located to obtain a review by such district court of the objection of the Attorney General.

Are there other events that require filing?

Charitable organizations must also give written notice to the Attorney General within 20 days of receiving notice of revocation, modification, or denial of its federal charitable income tax exemption.

 For further information regarding this new requirement on Oklahoma charitable entities, please contact any of our Firm’s corporate lawyers.

Brett Crane

918-581-5514

bcrane@praywalker.com

Bretton Crane, Jr.

918-581-5527

Bretton2@praywalker.com