Charitable Solicitation Laws FAQs

FAQBelow are frequently asked questions The INS Group has heard from clients when establishing a new nonprofit or when creating a strategic fund development plan.

Where do I register my nonprofit with the state or how do I know if our organization has registered and is current?

Most states now require that charities, nonprofits, and their fundraisers register with their state, describe their fundraising activities, file financial documents, and pay an administrative fee.

►In most states, filing takes place with the Secretary of State, the Attorney General, or the Tax Division and your state will require online or in-person filing.

►35 states and the District of Columbia now accept the standardized Uniform Registration Form. Additional supplemental information may be required with this form.

►Law for Change, contains listings of each state requirement and links for where to register or obtain a license.

What are the penalties if we don’t file or don’t file correctly?

If your organization is raising funds without the proper licensure, it could be subject to fines, administrative penalties, and potentially civil or criminal  prosecution.

What are the costs associated with filing, fees, and penalties?

Costs will vary depending on the state’s administrative fee, the amount of money the organization raises annually, and on the number of branches or chapters the organization houses within the state. In North Carolina, fees range from $50 to $400 annually.

What documentation do I have to provide when filing (Charitable Solicitation Compliance)?

Documents that must accompany annual charitable solicitation compliance filings usually include the nonprofit’s Form 990 (IRS annual return), audited financial statements, and/or state-specific financial reports. Documents that must be filed by nonprofit organizations with initial and/or annual registrations can also include: articles and bylaws, lists of officers and directors, IRS Determination Letter and/or Application for Exemption (IRS Form 1023 or 1024), fundraiser contracts and/or copies of direct-mail solicitations.

What do we need to know when hiring a fundraising consultant?

You should not hire a fundraising consultant without first confirming he or she has a license or is registered with your state as required by law. To search your state’s registry, you will need the name the consultant uses for business transactions (business, personal, organization, or legal name). In your state the person may be a licensed or registered solicitor, fundraising consultant, or both. A licensed solicitor may automatically be given rights as a fundraising consultant or the licenses may be issued separately. Confirm which type of license the individual has and if current. Know what he or she is allowed to do under the license(s). Protect your organization from questionable actions or activities related to your fundraising strategies. If fundraising is questioned, supporters will question the organization’s ability to manage programs and its leadership’s credibility.

Gain additional nonprofit insights and register for our upcoming grant-writing webinar on Dec. 10, 2014 (2 pm – 3:30 pm ET): http://theinsgroup.com/need-funding-tried-true-strategies-creating-winning-proposal/.

 

 

 

 

 

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