You know that fundraising is an essential part of any nonprofit organization, but did you know that the act of fundraising can trigger regulatory requirements?
Thirty-nine states plus the District of Columbia require that nonprofit organizations seeking donations for charitable purposes from their residents must submit specific financial and organizational information, usually on an annual basis.
This process is called state charitable solicitation registration and applies regardless of whether the organization is located in the state.
States use the information:
- To give the public access to information about charitable causes soliciting from them.
- To ensure that these organizations are accountable and transparent.
- To protect their consumers and good-faith nonprofits.
To accomplish this, state forms require information on your: financials, board, legal status, mission, programs, organizational structure, and other statistics.
What this means for you
If you have solicitation campaigns in multiple states, you may need to register in all of them.
Organizations that receive online donations may have to register in all states from which they receive donations, particularly if the site directs people to donate or receives substantial and ongoing contributions and/or if the charity follows up with site visitors by having them sign up for newsletters and emails that ask for donations.
What to consider
If you’ve gone through or are about to embark on the process of registering in each state, doing so can seem tedious, complex, and daunting. And it can be.
Since consumer protection is mostly a state responsibility, each state has its own forms, requirements and deadlines.
While many states request similar information, the degree of detail and backup documentation vary, as do the fees and platform. Factor in time to organize the requirements.
As you go through state websites and forms, keep the following in mind:
- Is my organization required to register in the state — what are the exemption rules?
- Do I register by form or online?
- About 4 states require online registration and a few others provide it as an option.
- What is the state’s due date for annual reporting?
- Are extensions allowed?
- What is required as backup documentation and what are the signature requirements?
- Some states require board signature or notary.
- What is the fee and to whom is it paid?
One thing that is common almost across all states is that they require charitable solicitation registration prior to solicitation in their state. Some states have a penalty for violations of this rule but will be open to new registrations if done as soon as the organization becomes aware of the requirement.
While you’re working through your registration remember time, patience, research, and organization will be key.
The three step process found at Simple Charity Registration can help you. A questionnaire will ask you relevant questions, complete the forms, provide a checklist for filing each form, and send you renewal reminders, saving you some of your time, patience, research and organization. Start a free no-obligation account and get your home state free starting today.
We love talking about fundraising here at Qgiv, but sometimes we like to bring in another voice to the conversation. This article is by Culin Tate, founder of Simple Charity Registration, a group of experts devoted to making your charity registration process simple. He’s got some great information about how to handle your nonprofit’s state registrations.
Once you’ve got your charity registered, it’s time to dive into expanding your online fundraising efforts. Qgiv can help! Schedule a demo and have one of our experts walk you through a personalized tour of Qgiv and learn how we can help you simplify (and broaden!) your online fundraising.