Online Fundraising

Generally, charitable solicitation laws aim to protect the public from deceptive charitable solicitations which includes fraud and misuse of charitable donations. Thus, internet fundraising also fall within the broad definition of ‘solicit’ and ‘solicitation’.

With the increase of online solicitation (e.g. social media, online cause-related marketing promotions, an interactive donate button on the charity website), the question of who is the charity targeting begs the question if and where is registration required. To assist state charity officials with determining authority, the National Association of State Charity Officials (NASCO) provided guidelines about how to handle internet fundraising. These guidelines are known as the Charleston Principles.

General Guidelines

While the principles are broad and leave a lot of room for interpretation, the take-away is that an entity that holds a principal place of business in a state and uses the internet to fundraise charitable donations, must register in its state of domicile. However, if the organization’s offline activities don’t trigger registration outside of their state of domicile, in most instances, the Charleston Principles can be applied. If the entity solicits contributions through an interactive website (publishes a “donate button”), registration may be required if the entity 1) specifically targets persons physically located in the state, or 2) receives contributions from the state on a repeated and ongoing basis or a substantial basis through its website.

Keep in mind that the principles are to be used as guidance and not to be taken as law. With that said, there are at least three (3) states that have defined their registration threshold based on repeated and ongoing basis and/or substantial basis, which would likely trigger registration requirements for online solicitations. There are over a dozen other states that do not follow the Charleston Principles and, therefore, registration is required even if the organization solely solicits via the internet.