Charitable Solicitation Registration
Fundraising activities are regulated by state law. Many states require charitable nonprofits as well as any paid professional “fundraising counsel” or consultant hired to assist the nonprofit with fundraising activities, to register with the state before the nonprofit or professionals solicits any donations. Additionally, many states require nonprofits that enter into agreement to share the revenue from sales activity with another organization to file with the state to disclose that fundraising activity. All in all – it’s complicated!
Note: this information is not intended as legal advice. We recommend you consult your nonprofit’s legal advisor if you have questions on how fundraising regulations affect your nonprofit.
If your nonprofit is engaged in fundraising activities, it is likely that it will need to file a registration form with any state where it is soliciting donations. The majority of states require registration in advance of engaging in any fundraising or solicitation activity. This requirement is known as “charitable solicitation registration.”
- Find the states that regulate charitable registration from this map.
- Find your state agency responsible for regulating fundraising activities. The charity official varies from state to state.
- Read about ethical fundraising.
- Games of chance may require registrations also.
- Registration of “commercial co-ventures” (In many states there is a registration requirement when either another nonprofit or a for-profit entity agrees to share the profits from sales with a charitable nonprofit.)
What is required? It depends…
Be aware that fundraising regulations are quite different state-to-state, and that no matter what vehicle your nonprofit is using for fundraising (Twitter, or texting, phone calls, or old-fashioned snail mail, and personal “asks”) if the underlying activity is solicitation – defined as asking for a donation – that’s regulated activity in most states. This requirement is often a surprise for nonprofits that have previously been unaware of the requirements, so we’ve gathered resources below to raise awareness about state law requirements and help you navigate the obligations your charitable nonprofit has to raise funds legally and ethically.
- Beware that the forms and requirements vary widely from state to state. We suggest visiting the websites of the regulatory authority in your state for up-to-date information on what forms and filings are required. Some states require nonprofits to file supplemental forms in addition to the primary registration form. Find your state’s charity official for more information.
- Some nonprofits hire the accountant/CPA that prepares the nonprofit’s IRS 990 to also prepare and submit state charitable registration forms, since much of the information required by states for charitable registration is the same information that the nonprofit reports on its annual report to the IRS, Form 990. Other nonprofits outsource this project to a firm that specializes in preparing state registration forms. Still other nonprofits prepare the forms using internal staff.
- For nonprofits seeking to file charitable registration forms in all the states where registration is required, the cost of filing fees plus labor for preparation of the forms can be very costly.
- Many states require not only initial registration but ongoing registrations in subsequent years. Late fees apply, so be sure to note renewal deadlines.
- More and more states are moving the registration process entirely online.
- Many state registration forms require signatures by more than one corporate officer, so allow time to collect the necessary signatures well in advance of filing deadlines.
- If your nonprofit will no longer be soliciting in a state where it had previously registered there may be special filing forms required to “un-register” in that state.
- In addition to registration requirements, several states also require “disclosure statements” that alert potential donors that the nonprofit is registered in the state. The disclosure statements must be included in solicitation materials, such as annual appeal letters and letters confirming pledges.
- Crowdfunding and giving days can trigger registration requirements in multiple states.
- There are exemptions in most states for educational institutions and churches/religious congregations, as well as for membership organizations that only solicit members. Summary of exemptions for educational institutions; Summary of religious exemptions (Webster, Chamberlain & Bean).
Registration in multiple states
Someday there may be a single website portal where a nonprofit can submit directly to multiple states all the information required to register for fundraising purposes in multiple states, but until that process exists, charitable nonprofits must submit individual registrations to various state agencies in each of the states where the nonprofit will be soliciting donations.
- Read more about the proposed single portal multi-state filing concept and tell us what you think.
Consultants and Grantwriters
Some state laws require nonprofits to make an additional filing when working with third-parties such as professional fundraising consultants. While registration of the consultant may not be the nonprofit’s direct obligation, it is prudent to verify that your fundraising consultant is registered, if required by state law.
- Top Ten Things to Know About Charitable Solicitation Regulation (Venable LLP)
- State requirements (IRS)
- Is your nonprofit involved in cause-related marketing or a commercial co-venture?
- Internet and Social Media Solicitations: Wise Giving Tips (Source: NASCO )
- Every nonprofit that raises funds using the internet and social media should be familiar with the Charleston Principles.
- Disclosure statements, state-by-state (Perlman and Perlman)
- 50-state charitable regulation laws (Affinity Fundraising Registration)
- 50-state fundraising compliance guide (Harbor Compliance)
– See more at: https://www.councilofnonprofits.org/tools-resources/charitable-solicitation-registration#sthash.dvtsEqON.dpuf