What You’ll Learn
If you’re a nonprofit in Rhode Island, or you’re a nonprofit considering fundraising or other activities in Rhode Island, you must understand the requirements that Rhode Island has established for nonprofits operating in the state.
How can you become familiar with these laws? Where should you start?
Start here. This state profile includes the basic requirements nonprofits must consider. Reading the profile and implementing appropriate compliance measures will help you prepare your organization for success in Rhode Island.
Getting to Know the State Nonprofit Corporation Law
*Important primarily for nonprofits incorporated in Rhode Island
Emma Woodhouse, handsome, clever, and rich, with a comfortable home and happy disposition, seemed to unite some of the best blessings of existence; and had lived nearly twenty-one years in the world with very little to distress or vex her. She was the youngest of the two daughters of a most affectionate, indulgent father; and had, in consequence of her sister’s marriage, been mistress of his house from a very early period. Her mother had died too long ago for her to have more than an indistinct remembrance of her caresses; and her place had been supplied by an excellent woman as governess, who had fallen little short of a mother in affection.
- Emma, Jane Austen
When reading a novel, we get to know a fictional character by the author’s description. The author tells us about the character’s appearance, purpose, actions, mannerisms, and values.
Nonprofit corporations are something like fictional characters.
We learn how a nonprofit will look and act and make decisions not by reading a novel, but by reading the state law (called the nonprofit corporation act) and the rules the nonprofit makes for itself (called the bylaws and articles of incorporation). The law and the organization’s own rules tell us the organization’s name, purpose, way of acting, and method of making decisions.
To get to know your own nonprofit, be sure to review the sections below.
State Nonprofit Corporation Law
For Religious Nonprofits
Nonprofit Religious Corporation Act: Rhode Island’s nonprofit corporation law mentions the option for nonprofit corporations to incorporate for religious purposes. However, the law lacks both: (a) specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs and (b) an option to incorporate expressly as a nonprofit religious corporation. R.I. Gen. Laws § 7-6-4; Confused about what it means to be a religious nonprofit corporation? See our whitepaper “Why a Religious Corporation?”
Reliance on Religious Guidance in Governance: Rhode Island law permits a director, in the fulfillment of the director’s fiduciary duties, to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter, but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition.R.I. Gen. Laws § 7-6-22
Understanding Religious Liberty in this State
*Important for all nonprofits doing business in Rhode Island, whether incorporated in Rhode Island or elsewhere
The religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.
- Our Lady of Guadalupe School v. Morrisey-Berru, 140 S. Ct. 2049 (2020).
Sometimes, the state or local government (like the city or county) makes laws that could conflict with your organization’s free exercise of religion or its sincerely-held religious beliefs.
For example, a law might require employers not to make faith-based distinctions between job candidates. If your organization’s mission is to pass on the teachings of your faith, you will need to make faith-based distinctions in evaluating candidates because their faith commitments will impact their abilities to partner in your mission and witness the faith to your program participants.
So what do you need to do? Be aware of the laws listed below. If any of the laws impact your organization—for example, if you are an employer or a facility open to the public—learn more about how you can protect yourself by reviewing Napa Legal’s religious liberty resources. Talk to an attorney if you have specific concerns.
Religious Liberty Protections
State Religious Freedom Restoration Act: Rhode Island has enacted a RFRA that protects the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny. These protections originate in a statute rather than the state constitution. R.I. Gen. Laws § 42-80.1-1, et. seq.; Not sure what a “religious freedom restoration act” is? Click here to learn the fundamentals.
State Constitutional Protection of Free Exercise: The Rhode Island Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment. R.I. Const. Art. 1, § 3
State Blaine Amendment: The Rhode Island Constitution does not contain a Blaine Amendment but also does not expressly protect faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Not sure what a Blaine Amendment is? Review the basics here.
Other Relevant State Laws and Regulations
Rhode Island currently has a statewide public accommodation law. The law does not include any religious exemptions or exclusions. Be sure you understand this and any local regulation that may apply to your organization.
Religious Freedom and Public Accommodation Laws: Rhode Island’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions. R.I. Gen. Laws § 11-24-1, et. Seq.; Not sure what a public accommodation law is or what it means for your organization’s religious liberty? Learn the basics in this article which discusses the issue in the context of the case Fulton v. City of Philadelphia.
Protections for Religious Exercise in State of Emergency: Rhode Island law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Key Employment Laws and Regulations
In addition to tracking with the protected classes in the federal anti-discrimination employment law, Title VII of the Civil Rights Act of 1964 (which applies to employers with 15 or more employees), Rhode Island prohibits employers with 4 or more employees from discriminating on the basis of age, sexual orientation, gender identity or expression, disability, and country of ancestral origin. See R. I. Gen. Laws § 28-5-7. An employer is any person who has four or more employees. No religious exemptions apply to this requirement. Local governments may also have employment-related regulations. An attorney can help you understand what requirements apply to your organization.
Religious Freedom for Employees: R.I. Gen. Laws § 28-5-7
Conducting Activities or Programs in this State
Understanding the Business Registration Requirement
*Important primarily for nonprofits doing business in Rhode Island but incorporated elsewhere
If you are fundraising or conducting activities in this state, you must consider whether you need to register as a foreign nonprofit corporation. The state law requires entities that “conduct affairs” in Rhode Island to register. An attorney can help you decide whether you need to register based on the type and volume of activities you have in this state.
Business Registration Statute
Fundraising and Charitable Registration in This State
How to Know (And What to D0) If You're Fundraising In This State
*Important for both Rhode Island and Foreign Nonprofits
Not sure what “charitable registration” is? Need to review the basics? Read this article for a refresher.
In this state, religious organizations are automatically exempt from charitable registration requirements. R.I. Gen. Laws § 5-53.1-3(a)(13). The religious exemption is not limited to IRS Form 990 Non-Filers, such as churches.
If You're Fundraising In Multiple States, Make Sure You Understand the URS
In this state, organizations which are required to register have the option of registering through the Unified Registration Statement, which is a standardized charitable registration accepted in many states. Using the URS, rather than a state-specific registration form, has pros and cons. The URS typically must be submitted by mail. Rhode Island has an online filing system, and it may be more efficient to use that system rather than complete and mail the URS manually. Additionally, states that require charitable organizations to submit annual reports often use information from the state-specific initial registration to auto-populate annual reports, saving an organization time in the future.
Evaluate Whether You'll Need a Registered Agent
Some states require organizations to appoint a "registered agent" in the state as part of the organization's charitable registration. Rhode Island does not require this for charitable organizations having their principal place of business within the state. However, organizations with a principal place of business outside the state are required to have their director serve as registered agent for purposes of service of process, per R.I. Gen. Laws § 5-53.1-6.
Follow the Rules About Communicating with the Public
This state requires organizations to include specific statements whenever the organization is requesting donations (also called "charitable solicitation"). Below is sample language to use with charitable solicitations in this state:
This request is made in support of *ORG*’s mission to *PURPOSE* and its *PROGRAMS/ACTIVITIES*. For more information about these programs, contact *EMAIL*. Contributions to *ORG* are deductible (OR are not deductible) for federal income tax purposes.
If a charitable organization solicits contributions for or makes contributions through a solicitation to an unaffiliated organization, the written solicitation must include a statement stating such and also stating that a list of organizations receiving such contributions may be obtained from the charitable organization. See R.I. Gen. Laws § 5-53.1-12.
Charitable Registration Statute
Charitable Registration Exemption Statute
Get Acquainted with State and Local Taxes and Exemptions
State and Local Taxes
*Important for all nonprofits doing business in Rhode Island, whether incorporated in Rhode Island or elsewhere
In this state, organizations that have received federal income tax exemption under IRC Sec. 501(c)(3) are automatically exempt from state income tax. Some organizations may choose to send a copy of their IRS determination letter to the state department of revenue to indicate the organization's position that it qualifies for the exemption. Note that, although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI may be subject to state income tax (See R.I. Gen. Laws § 44-11-11. Although the statutory section does not specifically say that unrelated business income of exempt corporations is taxable/taxed by the state, the statute defines “net income” as income that is taxable under federal law (minus certain deductions and losses). By implication then, UBI that is subject to federal income tax would also be subject to RI state income tax). Consult with an accountant or attorney to confirm.
It is also important to consider whether applying for sales and use tax and property tax exemption would be appropriate for your organization. An accountant or attorney can provide specific answers to these questions.
Corporate Income Tax Statute
Rhode Island imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status. R.I. Gen. Laws § 44-11-1, et. seq.
Corporate Franchise Tax Statute
Corporate Gross Receipts Tax: Not Present
What You Need to Know About Sales Tax
Sales and Use Tax: Rhode Island generally imposes a sales and use tax on religious organizations’ sales and provides no meaningful exemptions. Rhode Island generally imposes a sales and use tax on religious organizations’ purchases but provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases upon application. R.I. Gen. Laws § 44-18-30
State Tax Treatment of Unrelated Business Income: R.I. Gen. Laws § 44-11-11
Property Tax: Rhode Island imposes property tax and provides only fragmented property tax exemptions that include only a narrow subset of religious organizations, such as churches, or that apply only to a narrow category of religious and/or charitable property uses. R.I. Gen. Laws § 44-3-3
State-Specific Special Requirements
A volunteer attorney in Rhode Island.
This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.
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**Please note that the following state profiles are forthcoming and will be published soon:Hawaii and Washington