The Who, What, Where, and Why of Fundraising Compliance

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Posted on July 23, 2018 by Harbor Compliance in Nonprofit Compliance.

Charitable solicitation, or fundraising, is simply the act of asking for donations to support a charitable cause. But given the many vehicles available for fundraising today, that “ask” can take many forms, and it can also travel a long way from home. Since fundraising is a regulated activity, requiring registration with state charity offices in many states, this presents some challenges for nonprofits. What activities count as soliciting, and where?

If you have a thorny fundraising question, or you’re wondering about a particular state requirement, we’ve probably been there and managed it. And we’ve also probably published a resource that can provide the answers you need. To help you sort it all out, we’ve gathered up some tips and resources for running compliant, successful fundraising campaigns.


As we noted above, charitable solicitation means asking for a donation. It doesn’t matter if you receive a donation in return; asking still counts.

Sometimes, who you ask does make a difference. When nonprofit organizations (such as professional associations or alumnae associations) solicit funds from their own members, that is generally not considered fundraising. But if the same organization sent a general fundraising invitation to others outside of the organization, that would count.


How you ask doesn’t really matter. All of the following may qualify as fundraising:

    • In-person requests for donations by volunteers, staff, or board members
    • Requests by email, newsletters, or mailers
    • Appeals made on websites and social media
    • Crowdfunding campaigns
  • Grant applications


Where is an important part of the fundraising equation. Fundraising always follows the donor, because that’s where the request is received. For example, if a New York nonprofit sends a request to a Utah resident, the nonprofit has solicited in Utah.

Since requests for donations made on the internet have the potential to reach audiences in all 50 states, online solicitations trigger potential registration requirements nationwide. That includes donation buttons on your website, or fundraising appeals made on social media.

Forty-one states require fundraising registration, and many of those states also require specific disclosures to be included in all fundraising materials. Iowa just requires the disclosure statement. Many of these filings must be renewed, often annually. Bookmark our map of state fundraising requirements to consult anytime you have questions.

How much?

In some cases, how much you receive in donations may make a difference. In some states, your nonprofit may be exempt from fundraising registration requirements if your total annual nationwide contributions fall under a certain threshold. Unfortunately, being exempt from registration doesn’t necessarily mean being exempt from paperwork.


So why does fundraising registration matter?

Fundraising registration provides state charity officials with important information about the charities soliciting their residents. It promotes insight, access, and transparency within the sector. Nonprofits that are fully registered demonstrate their commitment to sustainable operations, which can help build trust with potential donors, grant funders, and the public. In addition, registering to fundraise is a core responsibility of nonprofit boards of directors, as part of their duty to provide sound governance.


What do you need to do to register?

In the age of the internet, these requirements may seem daunting at first. With messages being broadcast more or less globally, many nonprofits are subject to requirements in all of the states that impose them. If your nonprofit is in that boat, and you haven’t registered, first, don’t worry. State charity officials are more interested in seeing charities register proactively than in punishing organizations that haven’t registered, although citations and penalties are among the tools at their disposal.

One option for limiting your regulatory obligations is to limit donations to the states where you are registered. You can do this by publishing notices on your website and other fundraising appeals saying that you will accept donations only from certain states. Another option is to register nationwide proactively, and then fundraise as widely as you wish. Generally, state fees are scaled to make registration affordable even for small nonprofits.

Researching all of that on your own, state by state, would take a lot of someone’s time. Fortunately, we have extensive resources to help you manage the task. Our recently updated Fundraising Compliance Guide includes information on all aspects of fundraising compliance, including detailed state filing instructions and contact information for state charity offices in all 50 states. The guide also includes sections on disclosures and audit requirements, professional fundraisers, commercial co-ventures, charitable gaming, charitable gift annuities, and more.

We’ve also published several white papers on fundraising compliance, including our most recent, Charitable Solicitation Registration: Navigating the Complexities, produced in partnership with Charity Navigator. We also run a free monthly webinar with Account Executive Brock Klinger, which is a great way to learn and ask questions. You can register for an upcoming session here. (It’s definitely more fun than reading state statutes!)

Why Not?

The final question we’d like to leave you with is this: if you’re not registered everywhere you need to be, or if you’re not sure what requirements apply to your nonprofit, why not take a step toward changing that today? With a phone call, you can find out exactly what it would take to achieve total compliance. We can provide the answers you need and point you in the right direction, or we can simply take the entire task off your plate and manage nationwide filing for you. The investment is very modest compared to the green light that it gives you to fundraise without borders.

If you would like to talk to a compliance specialist about registering your nonprofit nationwide, or if you have any questions about how the rules might apply to you, feel free to reach out or give us a call, 1-888-995-5895. We’ll be glad to help.