All Posts in Category: fundraising registration

Registering to Fundraise in Each State

You’ve decided to start your own non-profit charity to raise money for a cause you are passionate about. This is great, but there is a vital step you must first take before you can send out your first ask and/or accept the first dollar. You must register to fundraise.

Specifically, a charity must register with their state in order to solicit charitable contributions if state law requires and others where it solicits funds. Currently, there are 39 states and the District of Columbia that have such requirements.1

As each state has its own registration requirements, it is important to research the filing requirements (which change frequently), keep a list of the states in which your organization is registering and how far along in the registration process your organization is, and ensure registration deadlines are met.

Every year thereafter,3 your organization is required to renew its registration with each state in which it is registered and continues to solicit charitable contributions. Most states require a completed renewal form and payment of a fee. Similar to the initial registration, will need a copy of your organization’s most recently filed Form 990, your most recent audited financial statements (if applicable) and in some states a notarized signature on renewal form. A few statesallow renewals through a web site. Each state has a different deadline to renew, and many states will grant an extension to file if requested in writing by the deadline. It is very important to keep a calendar of the deadlines to renew in each state – late fees add up very quickly!

Registering to fundraise in most states requires the following:

  • A completed registration form and payment of a fee
  • The organization’s articles of incorporation and by-laws
  • A list of the organization’s board of directors and officers
  • A copy of the determination letter that the organization received from the IRS
  • The methods the organization intends to use to solicit charitable contributions
  • A copy of the organization’s most recently filed Form 990

Some states also require your organization’s most recent audited financial statements if the revenues exceed a certain threshold, and others require a notarized signature on registration forms. A few states also require your organization to have a registered agent with a valid mailing address within the state in order to register2.

Your organization will receive a letter from each state that approves the registration application. If the application is lacking in some way, the state will send a letter requesting additional information or documentation. Some states require a registered organization to include a specific disclosure regarding its registration with all solicitations for charitable contributions. Smaller organizations without dedicated staff typically outsource registration and renewal.

Overall, remember that your organization needs to register in a state if it solicits charitable contributions in that state. Whether you ask for money by email, over the phone, by mail, in person, through a website or through a fundraising event, these are all considered soliciting charitable contributions.

If you’re unsure if your organization should register with a particular state, reach out to Caritas Registration, LLC at info@caritasregistration.com or by calling (480) 428-3392 today and we’ll help you determine what steps, if any, you need to take to get into compliance.

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1The states that do not require a charity to register to solicit are Nevada, Idaho, Montana, Wyoming, South Dakota, Nebraska, Iowa, Indiana, Texas (unless raising funds for veterans or public safety), Vermont, and Arizona (unless raising funds for veterans). Additionally, none of the U.S. territories have such a law.

2States that require a registered agent with a local mailing address within their state include Michigan and North Dakota. The District of Columbia also requires it. Some states allow the Secretary of State or a key officer to be named.

3Some require renewal bi-annually. These include Georgia and the District of Columbia. Missouri does not require renewal at all. 

4States that allow an organization to renew online include AL, AK, CA, CO, FL, GA, HI, ME, MS, NJ, NM, NY, OH, RI, SC, TN, UT, WA, WI.

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New Jersey Charitable Solicitation Law Update

According to the Center for Non-Profits, the state association of nonprofits in New Jersey, effective May 1, the  New Jersey Division of Consumer Affairs is requiring all annual charities registration renewals and extension requests to be filed through a state-run online portal. New Jersey requires most charitable organizations that solicit funds in the state to register and file annual financial reports. There are exceptions for small organizations that raise less than $10,000 annually and do not use a professional fundraiser, religious organizations, and educational organizations. The Center for Nonprofits has asked the Division to revert to accepting paper filings due to concerns about the online portal, including vague instructions, lack of available context-sensitive assistance, limited responsiveness to inquiries, difficulty in locating and uploading information, recordkeeping and processing backlogs at the Charities Registration office which can prevent access to key areas of the portal, and that it fails to meet the statutory requirement to incorporate Form 990 information by reference.

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Fundraising – When to Seek Permission

Fundraising to carry-out a nonprofit’s charitable purpose is necessary for the survival of the organization.  However, holding a 501(c)(3) tax exemption does not give unlimited permission to fundraise.  Many nonprofits are unaware of charitable solicitation laws within their own state much less other states where they may be asking for and/or receiving contributions.

Nonprofits that solicit donations or funds (directly or indirectly) must register in its home state if its home state requires registration. Nonprofits may also be required to register outside of their home state depending on where the donors its solicitations are reaching reside the amount and frequency of donations. Examples of fundraising that could trigger the duty to register include the following:

Traditional Fundraising

Traditional fundraising techniques include direct mail, telephone solicitation, door-to-door fundraising, individual asks, special events, grant applications, and corporate solicitations. If a nonprofit conducts any of these direct methods of fundraising, it must register in its state of domicile and any state its solicitation is targeted to reach if those states regulate fundraising.  Some states may not require an organization that solicits grants solely from foundations and governmental units to register if that is the only method in which it solicits donations in the state.

Media Fundraising

Fundraising through radio, television, newspaper and magazine ads raises special compliance considerations. If the solicitation is distributed or aired locally or regionally, the organization must register in each state where the residents of such state can encounter the broadcast or periodical.  If the advertisement or program is distributed or aired nationally, the organization must register in all states that require registration.

Internet Fundraising

Internet fundraising includes solicitations delivered via email, a website, or social media. While email is digital and included in the list of Internet based fundraising methods, for registration purposes email is treated like direct mail.  Therefore, the organization would be required to register in the state(s) where the individual(s) receiving the email is located.

For online solicitation mediums such as having a donate now button on the organization’s website or the website of a fundraising intermediary, or being the beneficiary of a social media or crowd funding promotion, registration may be required.

Some states follow the Charleston Principles which offers a guideline based on repeated, substantial or ongoing donations received through these methods.  However, the organization may be required to register with those states that have not adopted the Charleston Principles and where it has met the Charleston Principals repeated, substantial or ongoing donations test. If the organization receives an unsolicited donation via a donate button on its website it may not trigger a duty to register in states that follow the Charleston Principals. However, once the organization takes that individual’s contact information and sends a request for a follow-up gift, that is considered a solicitation and triggers state registration requirements.

Auctions, raffle/bingo, vehicle, cause-related marketing

Many states restrict raffles, bingo and other forms of gaming. Violations of gaming laws can result in criminal liability. Some states offer exceptions for nonprofits but the rules must be strictly adhered to. Many such states require nonprofits engaging in gaming activities to obtain state and local licenses.

Contracts with Professional Fundraisers

If the nonprofit organization engages professional fundraisers (Professional Solicitor, Professional Fund-Raising Counsel, Commercial Co-venturer) to assist with fundraising or strategy for any of the methods listed above, the nonprofit and the professional fundraiser may both be subject to filing requirements depending on the state and type of assistance provided. For more information, see our blog post on Working with Professional Fundraisers.

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