{"id":2131,"date":"2016-06-22T16:34:01","date_gmt":"2016-06-22T20:34:01","guid":{"rendered":"https:\/\/www.harborcompliance.com\/blog\/?p=2131"},"modified":"2023-09-15T14:52:21","modified_gmt":"2023-09-15T18:52:21","slug":"top-20-reasons-nonprofits-register-charitable-solicitation","status":"publish","type":"post","link":"https:\/\/www.harborcompliance.com\/blog\/top-20-reasons-nonprofits-register-charitable-solicitation\/","title":{"rendered":"Top 20 Reasons Nonprofits Register for Charitable Solicitation"},"content":{"rendered":"\n
\"blog-header-20-reasons-to-register\"<\/figure>\n\n\n\n

Updated December 2020<\/em><\/p>\n\n\n\n

State charitable solicitation requirements affect nearly every charity that fundraises in at least some way. Simply being recognized by the IRS as a 501(c)(3) organization does not mean that a charity can fundraise limitlessly. Most states also regulate charitable solicitation. Forty-one states require charities to register to solicit funds<\/a>. Charities must pay close attention to state solicitation requirements to stay compliant, avoid penalties, and maintain credibility with their donors.<\/span><\/p>\n\n\n\n

In this article, we\u2019ve compiled the top twenty reasons why organizations register for charitable solicitation. This list is by no means exhaustive, nor do these reasons apply to every organization in every state. Most organizations will find that at least some items on this list apply to their situation. Our goal is simply to get you, your development team, and your board of directors thinking about how the requirements apply to your organization.<\/span><\/p>\n\n\n\n

The first six reasons affect most organizations.<\/h2>\n\n\n\n

1. Being incorporated in a state that requires registration<\/h3>\n\n\n\n

The odds are that your charity is incorporated in one of the 41 states that require charitable solicitation registration. The state of incorporation is likely where many of your board members reside and where your charity solicits funds and receives donations. If your organization has not yet reviewed the requirements<\/a> in your incorporation state, this should be your priority.<\/span><\/p>\n\n\n\n

2. Soliciting in any of the 41 states<\/h3>\n\n\n\n

State requirements apply when a charity solicits donations from residents of that state. Many nonprofits solicit without being aware of that state\u2019s registration requirements, sometimes for years. If you have solicited from residents in a state and plan to continue, review that state\u2019s requirements and register as needed. Some states assess a penalty for registering after solicitation has begun.<\/span><\/p>\n\n\n\n

3. Receiving donations in certain states<\/h3>\n\n\n\n

Regardless of solicitation activities, states often have separate standards that apply when donations are received. Some states, like California, require registration within 30 days of receiving assets. Other states consider \u201crepeated\u201d and \u201csubstantial\u201d gifts from a state enough to trigger registration. This gray area causes headaches for charities of all types and sizes. It\u2019s best to review your organization\u2019s fundraising footprint and decide on a proactive registration strategy<\/span>, which could include partnering with an expert compliance team to manage your fundraising registrations and renewals<\/a>.<\/p>\n\n\n\n

4. Avoiding bad PR<\/h3>\n\n\n\n

Like <\/span>California<\/span><\/a>, <\/span>Virginia<\/span><\/a>, and <\/span>Pennsylvania<\/span><\/a>, many states post public lists of delinquent, illegitimate, or fraudulent charities. Negative PR from the states or the media can undermine fundraising efforts and harm a charity\u2019s brand. Nonprofit executives and boards should take great care to avoid any negative PR that can stem from noncompliance.<\/span><\/p>\n\n\n\n

5. Protecting the reputation of officers and directors<\/h3>\n\n\n\n

Staying compliant with charitable solicitation requirements also helps your charity protect the reputation of its officers and directors<\/a>. Negative PR reflects poorly on the leadership and can lead to personal embarrassment. This is especially true for large charities whose board members are often high profile industry, government, and business leaders, but also holds true for smaller organizations.<\/span><\/p>\n\n\n\n\"Nonprofit<\/a><\/span>