Raising money has always been a potential source of liability for nonprofit organizations. If you’re planning to solicit donations, you need to register to fundraise. Read Chisholm Law Firm’s blog to learn more about fundraising registration.
What is Fundraising Registration?
Generally speaking, if your 501c3 nonprofit wants to ask people or organizations in a particular state for donations, you will need to register to “solicit” donations. Many states require nonprofits to apply and receive their registration before they start soliciting.
Registration is essential for a few reasons, the first being that it is legally required. Additionally, donors want to know that they’re giving to a trustworthy organization. Registering to fundraise tells donors that you are serious about your mission to change the world.
If you don’t register before you fundraise, you could face several consequences. These consequences can include fines, civil or criminal action, revocation of your 501c3 status, or lost donations. Be sure that you register before you start soliciting.
Which States Require Registration?
Currently, there are about 45 states that require some type of fundraising registration, whether that is with a soliciting license or disclosure statement. The following eight states don’t need a charitable solicitation registration or disclosure statement but may require other paperwork:
- South Dakota
Unfortunately, there isn’t a national registry, so you have to register in each state individually. The good news is that if you have a new nonprofit, you may be exempt from the requirement in many states if your revenue is under $25,000. But each state’s needs are different.
It’s crucial to research the states that you plan on soliciting in before you begin asking for donations. If you’re looking for more information about a specific state, you can check out this map, view this chart, or visit the IRS’s website.
When Do You Have to Register?
You will have to register with the state before hosting any fundraising activities or soliciting donors. Typically you have to renew the Solicitation License or Fundraising Registration with each state every year.
For example, in Florida, the Solicitation License is filed with the Florida Department of Agriculture and Division of Consumer Services. The expiration date is one year from the initial date of compliance with registration requirements.
How Do You Register?
Registration will vary depending on the state you want to fundraise in. However, you will likely need to submit the state’s specific form, pay the filing fee, and provide supporting documentation. Again, this will all require research.
To find the state-specific forms you will need, you can visit this page on the IRS’s website or find the office in charge of nonprofits. You will also need to pay filing fees to the state government.
Speak with an Expert
If your nonprofit plans to raise money in other states, you should consider speaking with a nonprofit attorney about registering in those states to make sure that you are in compliance with the law. Here at Chisholm Law Firm, we can help you register the right way the first time.
Chisholm Law Firm has helped thousands of people start and grow nonprofits that impact the world. If you want the best for your nonprofit, look no further than Chisholm Law Firm. Our clients have a 100% success rate for nonprofit and trademark filings*.
You can rest assured that your nonprofit is in the best hands and that we’ll get everything done right the first time. Call us today to schedule your free consultation.
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