Case Study: Navigating State Fundraising Registrations

Background: We frequently encounter national non-profits looking to expand their fundraising efforts across all 50 states using online and mailed solicitations. Ensuring compliance with state laws is essential for these organizations to avoid legal issues and maintain donor trust.

Challenge: Understanding and adhering to the diverse fundraising registration requirements across states, determining whether solicitation permits were needed in each state, and staying updated on current laws.

Key Insights:

Broad Definition of Solicitation:

• Solicitation includes nearly all forms of requests for contributions, whether oral, written, or online.Physical presence in a state is not necessary; even sending an email or letter can require registration.

Charleston Principles:

• These principles provide guidelines on when Internet-based solicitations require state registration.Registration is generally necessary if:The non-profit targets individuals in a specific state.The non-profit receives substantial or ongoing donations from a state's residents via passive solicitation (e.g., "donate now" buttons).

Current Requirements:

• Currently, 40 states require non-profitable organizations to register when soliciting within their borders. Some states require annual renewals and specific disclosures on solicitation materials.

Solution:

To ensure compliance, many of our national non-profit clients have decided to register in all 40 states. They often use our services to handle the registrations and annual renewals cost-effectively, which streamlines the process and reduces administrative burdens.

Outcome:

• These non-profits expand their fundraising efforts smoothly and legally.
• Registration in all required states prevents potential legal issues and penalties.
• Leveraging our services allows these organizations to focus more on their mission and less on administrative tasks.

Who This Affects:

This case study is relevant to a wide range of

non-profits,particularly those engaged in multi-state fundraising

efforts. This includes:

• Large national non-profits with substantial fundraising operations.
• Medium-sized non-profits looking to expand their donor base beyond their home state.
• Any non-profit utilizing online donation tools or conducting mailed solicitations across state lines.

Therefore, for non-profits engaging in nationwide fundraising, understanding and adhering to state registration requirements is crucial.

Utilizing professional services for managing these registrations can optimize compliance and efficiency, enabling organizations to maximize their fundraising potential while minimizing legal risks.

This is a common challenge we help our national non-profit clients navigate successfully.