4 Things You Should Know About Fundraising Online

Basic Fundraising

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Donors continue to give at record levels, and they’re ready to support the good work you’re doing. They’re also time-strapped, distracted, and accustomed to being able to knock out tasks with the push of a button. It’s no surprise, then, that they’re giving more and more over the internet: online giving increased by more than 12 percent last year, and one fifth of those donations came in via phone.1 By going digital and mobile with your fundraising efforts through a provider like Qgiv, you can engage today’s busy donors and capture more precious dollars for your mission.

Exciting as it is to be able to fundraise 24/7/365 anywhere in the world, fundraising online does impose additional regulatory requirements on your nonprofit. The following explains the ins and outs of charitable solicitation registration and what you need to do to stay compliant when fundraising online.

1. From a regulatory perspective, what qualifies as fundraising, exactly?

Fundraising, or charitable solicitation, is the act of asking for donations. It doesn’t matter how you ask: personal requests from board members, crowdfunding appeals on social media, and invitations to donate in a newsletter are all fundraising. It also doesn’t matter whether you receive a donation in response. The act of asking is enough.

Another important aspect of fundraising is that solicitation takes place wherever the request is received. In other words, if your nonprofit is based in Ohio, and you invite donations from someone in Maryland, you have solicited in Maryland. Since fundraising appeals made on the internet potentially reach audiences everywhere, fundraising online basically means you’re fundraising in all 50 states.

2. Where do we need to register for online fundraising?

Currently, 41 states require nonprofits to register to solicit donations from their residents, and 25 require special disclosure language to be included in solicitations. To fundraise online, you’re required to register or file an exemption in each of those states. You can find a clickable map of the requirements, along with specific filing instructions for every state, on our website.

3. What does registration cost?

State filing fees are generally reasonable, often in the $25 to $50 range, and are often tiered based on gross annual revenue to ensure that registration is affordable for nonprofits of all sizes. In many states, registration is free. In addition, most states provide exemptions for smaller nonprofits. Unfortunately, this still requires filing for the exemption, so it doesn’t necessarily reduce the paperwork involved. For estimating purposes, state fees to register a nonprofit with gross annual revenue of $100,000 for nationwide fundraising will run roughly $1,400; a nonprofit with more than $1 million in revenue would pay closer to $5,000, a modest investment compared to the fundraising potential presented by being able to reach out and fundraise without borders.

While the fees are relatively modest, the time required to research state requirements, sort out how they apply to your specific plans and situation, and prepare and file paperwork can be significant. In addition, you will need to file periodic renewals in many states.

4. Why should we register? What happens if we don’t?

The biggest reason to register is simply that it’s required under state law. States can levy citations and penalties for failure to meet regulatory requirements, which can damage your reputation and erode trust in your organization. In addition, maintaining regulatory compliance is a primary duty of your board of directors, who may be held personally liable for failing to meet their obligations under state law.

The best reason for registering, however, is that meeting all of your legal obligations is important to building a strong, sustainable organization that donors can support with confidence. Registration affirms to the public that your nonprofit is authorized to solicit, which builds trust and encourages donations. For example, research has shown that donations increase when state-required disclosure statements are included in solicitations.

A compliant foundation

The internet provides an amazing opportunity to spread the word about your good work and engage people who share your passion for your vision and mission. Giving them a fast, easy way to donate whenever and wherever they find you is a great way to build much-needed funds for your work and launch long-term relationships. Taking the time to meet state requirements demonstrates your good faith and provides a strong, sustainable foundation for your nonprofit’s future.

There is a faster, easier way

If you find the prospect of researching and fulfilling requirements in 41 states intimidating, Harbor Compliance can help. Our compliance specialists can guide you through your options, or we can take the entire work of registration off your plate so you can get back to more pressing tasks. Just get in touch or give us a call, 1-888-995-5895, and we’ll be glad to help.

Author Bio

Harbor Compliance is not an accounting or law firm and does not provide tax, financial, or legal advice.

Ifeoma (Ify) Aduba brings more than 20 years of experience in nonprofit leadership to her position as nonprofit compliance specialist with Harbor Compliance. She currently serves as president of the board of the Pennsylvania Association of Nonprofit Organizations (PANO), board member of the Bucks County Women’s Advocacy Coalition, and president of the administrative ministries team at Doylestown United Methodist Church (DUMC). Ify holds a B.A. in politics from Mount Holyoke College and a master’s degree in nonprofit management from Eastern University.