Rhode Island House Bill H5562

Rhode Island 2025 Regular Session

• Introduced: 2/26/25
• Refer: 2/26/25
• Report Pass: 3/20/25
• Engrossed: 4/1/25
• Refer: 5/2/25
• Report Pass: 6/18/25
• Enrolled: 6/21/25
• Passed: 7/1/25

Caption

Provides that charitable organizations with a gross income of one million dollars ($1,000,000) or less can meet the required reporting and records requirements by providing either an IRS Form 900 or other approved financial statements.

Impact

The proposed legislation is expected to streamline the filing process for numerous charitable organizations. By adjusting the income threshold, many smaller organizations may be able to avoid the more cumbersome audit requirements that apply to larger entities. Supporters of the bill argue that this approach will enhance the operational efficiency of smaller organizations, enabling them to focus more on their missions rather than compliance. Additionally, the bill mandates that organizations with affiliates must file combined reports, which is intended to ensure comprehensive financial oversight and accountability within larger charitable networks.

Summary

House Bill H5562, introduced by Representative Justine A. Caldwell, seeks to amend regulations governing the financial reporting of charitable organizations in the state of Rhode Island. The bill suggests changes to Section 5-53.1-4 of the General Laws concerning the solicitation by charitable organizations, aiming to provide clearer financial accountability and transparency for such entities. Among the central points of the bill is the adjustment of the gross income threshold for financial reporting requirements from $500,000 to $1,000,000, allowing smaller organizations to meet compliance with less stringent documentation. This change is intended to ease the financial and administrative burdens on smaller nonprofits while still ensuring oversight for larger organizations.

Contention

Notable points of contention surrounding H5562 may emerge from differing perspectives on regulatory oversight versus organizational autonomy. Advocates for tighter regulations might express concern that lowering reporting requirements for smaller entities could create loopholes allowing misconduct or mismanagement to go unchecked. On the other hand, proponents argue that excessive regulations disproportionately hinder smaller charities, which could be particularly detrimental in the current economic climate where donations may already be strained. The balance between necessary oversight and fostering a supportive environment for charitable organizations may be a pivotal theme in the ongoing discussions surrounding the bill.