CHARLESTON, W.Va. – A new West Virginia state law that will save smaller charities money by not requiring a costly audit goes into effect today.
Prior to today a charity would have to complete a full audit if its contributions totaled $200,000. The new law increases the threshold to $500,000 and brings West Virginia in line with other state’s reporting requirements.
Secretary of State Natalie E. Tennant proposed the change during the 2015 legislative session. Senate Bill 351 passed both the House and the Senate and was signed into law by Governor Earl Ray Tomblin March 11.
“Our charities in this state are doing so much good work on a daily basis,” Secretary Tennant said. “This change will allow them to do more by getting government out of the way. Just because these charities are no longer required to do a costly audit, they are still required to do a financial review, which details their activity but is cheaper than an audit. This new law still holds them accountable. Transparency is still a critical part of this process.”
This is just one more way the Secretary of State’s Office is helping West Virginia’s charities.
During the Tennant administration, late fees have been lowered and the office continues to incrementally increase the threshold required for an audit all the while remaining vigilant to crack down on charity fraud and educating donors.
President and CEO Paul Daugherty of Philanthropy West Virginia, the state leadership association that represents more than 75 grant making foundations, giving programs and philanthropists across the Mountain State, says his organization and the West Virginia Nonprofit Association are thrilled.
“This allows for nonprofits and foundations to put more financial resources into their local communities,” Paul Daugherty said. “These upgrades allow smaller nonprofits and foundations to maintain accountability, reduce the burden they experience with the high cost of audits and continue to serve critical community needs. As our friends at the West Virginia Society of CPAs agreed during this process, this adjustment in the law brings us in line with other states’ audit requirements and I believe it is a good improvement.”
Daugherty said audits typically cost small charities between $5,000 and $10,000 a year.
“When you donate to a smaller charity you can feel better knowing your money will more than likely help someone who lives in your neighborhood or has children in the local school system,” Secretary Tennant said. “Now this extra money that would at one time be used on a mandatory audit can now go to help your friends and neighbors.”