Charleston Waterkeeper broke state nonprofit rules by soliciting money and other contributions without registering first.

Waterkeeper statement

Charleston Waterkeeper officials issued a statement on its state violation notice and loss of nonprofit status:

“Charleston Waterkeeper has received notification from South Carolina’s Office of the Secretary of State of its ‘Failure to File Registration Statement.’ This arises out of the same circumstances that led to the revocation of our 501c3 designation. Charleston Waterkeeper is in communication with the IRS and the State of South Carolina to assure submittal of all outstanding and required paperwork.

Charleston Waterkeeper submitted initial filings to the IRS in June; however, these documents could not be processed as additional paperwork was required. Charleston Waterkeeper continues to work with its CPA and general counsel to assure this issue is addressed and at the same time continues to devote its resources to protect Charleston’s right to clean water.

Charleston Waterkeeper is incredibly grateful for the many seasoned nonprofit professionals who have helped us through this detailed process. We are hopeful that our tax-exempt status will be reinstated, and in the meantime, we continue to operate under the Waterkeeper Alliance’s fiscal sponsorship.”

The Secretary of State notified the fledgling pollution watchdog group of the violation this week. Waterkeeper staff responded immediately by registering, so no penalties are expected.

But the violation is likely to further damage confidence in the group among the environmental community that supports it. It comes as Waterkeeper officials struggle to regain the group’s federal status as a nonprofit, an exemption lost for not filing a required financial reporting form with the Internal Revenue Service for its first three years of operation.

That form also is required to register as a nonprofit with the S.C. Secretary of State. The state office accepted a copy of a letter from the IRS approving an extension to file that form.

“Any organization that solicits in South Carolina must register as a charitable organization with our division. Charleston Waterkeeper not only solicits monetary donations via Waterkeeper Alliance, but they also solicit for material items as well on their website,” said Renee Daggerhart, of the Secretary of State office.

The group lost its federal status in March for not filing the IRS form for the years 2009-2011, when it operated as a nonprofit under sponsorship by the international Waterkeeper Alliance. It has continued to solicit contributions since March under an extension of that sponsorship.

The group submitted paperwork to the IRS in June, but was asked for more details. It has not completed those forms.

Cyrus Buffum, director, and Lindsay Nevin, board chairman, were asked for comment on the state notice and responded with a formal statement saying the group is working to resolve the issues.

Charleston Waterkeeper officials have declined to release details about the group’s revenues, expenses and operating budget. They said they will release the financial details in the tax-exemption filing once it’s approved by the IRS. That information is public.

Concerns have been raised in the environmental community about the group’s effectiveness to date.

The funding troubles come as the group launches its first public information programs — Charleston-Harbor-area water samplings and an online swimming guide. The programs piggyback existing S.C. Department of Health and Environment Control programs and use some state data.

Water- and river-keeper organizations are self-organized monitors of water quality that operate under the auspices of the international alliance. The alliance has about 200 local organizations. Because the groups monitor rivers and wider waterways, the various names reflect the area they watch.

Reach Bo Petersen at 937-5744, @bopete on twitter or Bo Petersen Reporting on Facebook.