Permit for Charitable Solicitations
Prices start at $599 plus state filing fees.
State legislation regulates fundraising efforts. Before soliciting gifts from citizens of a state, many states require charitable nonprofits, and just about any paid professional “fundraising counsel” or consultant engaged to assist the nonprofit with fundraising efforts, to register with the state. Furthermore, several states require organizations that enter into a revenue-sharing arrangement with another group to submit a report with the state disclosing their fundraising activities.
Even if your organization is requesting donations, it will almost certainly need to file a registration form with the state where it is soliciting them. Before engaging in any fundraising or solicitation activity, the majority of states need registration. “Charitable solicitation registration” is the term for this obligation.
What are the prerequisites? It all depends…
Fundraising regulations vary by state, be fully aware that, and that regardless of the vehicle your nonprofit uses for fundraising (your website, Twitter, texting, phone calls, or old-fashioned snail mail and personal “asks”), if the underlying activity is solicitation – defined as asking for a donation – that activity is regulated in most states. This requirement frequently comes as a shock to organizations that were previously ignorant of the requirements, so we’ve compiled a list of resources below to assist you to learn more about state law requirements and negotiating the legal and ethical fundraising duties that your benevolent charity faces.
- Take note that the paperwork and regulations differ significantly from one state to the next. For the most up-to-date information on what forms and filings are necessary, we recommend checking the websites of the state government agency that oversees fundraising in your state. Nonprofits in several states are required to complete supplemental forms in addition to the main registration form.
- Because 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, some nonprofits hire the accountant/CPA who prepares the nonprofit’s IRS 990 to also prepare and submit state charitable registration forms. Other charities delegate this task to a specialist service provider or a legal company that specializes in preparing state registration forms.
- The cost of filing fees and labor for preparing the forms can be high for NGOs wanting to file charity registration forms in all states where registration is necessary.
- Many states demand not only initial registration but also annual renewal registrations. Late fines occur, so make sure to keep track of renewal dates.
- In an increasing number of jurisdictions, the registration procedure is being moved fully online.
- Many state registration papers demand signatures from many corporate officers, so plan ahead of time to get all of the necessary signatures.
- If your organization is no longer soliciting in a state where it was previously registered, specific filing documents to “unregister” in that state may be necessary.
- Several jurisdictions require organizations to include “disclosure statements” on written solicitations or pledge/gift confirmations in addition to registration requirements. The purpose of the disclosure statements is to inform funders that the nonprofit is registered with the state. Some jurisdictions have highly rigorous disclosure statement standards, including font size and other specifications about how disclosure statements are presented in written documents.
- Because the hoped-for effect of such activities is that people transmit a link and urge their friends and family to give, crowdfunding and giving days might trigger registration requirements in numerous jurisdictions. Those friends and family members are frequently located in distant states.
- Most states include exemptions for educational institutions, churches/religious groups, and membership organizations that only solicit their members get.
Registration in multiple states
Eventually, a single website portal may exist where a charitable nonprofit can submit all of the information required to register for fundraising purposes directly to multiple states, but until that time comes, charitable nonprofits must submit individual registrations to various state agencies in each of the states where they will be soliciting donations.
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