Do you want to ask for donations through social media, email campaigns, telethons, or snail mail? Are you planning a 5k to raise money for your cause? Want to encourage giving to your nonprofit through a Bingo night or raffle contest?
Before your nonprofit does any type of fundraising (in person or digitally) you’ll want to be sure you’re aware of your state’s fundraising regulations. Most states require some type of registration to enable your organization to solicit (ask for) donations.
What is Charitable Solicitation Registration (CSR)?
While the exact process varies widely depending on your state, 43 states require some sort of registration to be able to fundraise legally. These requirements are called charitable solicitation registrations, and most states need this registration in advance of any fundraising or solicitation efforts.
If you’re looking to fundraise in multiple states, you’ll have to comply with each of their requirements. The only states that currently don’t require charitable solicitation registration are Indiana, Idaho, Delaware, Nebraska, South Dakota, Vermont, and Wyoming — and some states, like Arizona, only require certain types of nonprofit organizations to register.
You can look into which government agency handles fundraising in your state and check their website for details on which specific forms and filings you’ll need to fill out. Or, see this useful chart by NASCO to help you get started.
Practical Considerations:
Prepare for the costs.
Nonprofits looking to file in states where CSR is required should expect to pay filing fees if applicable. Initial CSR filing fees range from anywhere between $10, all the way up to $500. Preparing the forms may also bring up costs due to the labor and time spent. If a state requires registration renewals, be on the lookout for deadlines so you don’t risk paying late fees.
See if your nonprofit type is CSR exempt.
Most states will consider educational institutions and religious congregations exempt from CSR. Membership organizations that only ask for donations from their own members may also be exempt.
Plan ahead with your team.
Brainstorm how your nonprofit will approach CSR compliance. Make a list of the states you’ll want to solicit donations in and check each state’s requirements and deadlines. Since many CSR forms require multiple signatures, give yourselves time to gather them before those deadlines. Decide who will be responsible for preparing the forms, filings, and/or annual reporting, such as your organization’s accountant, a specialized service provider or law firm equipped to prepare CSR forms, or your own internal staff.
Check your compliance.
Even if you’ve successfully registered in, say, 10 states, make sure you aren’t accidentally soliciting in states outside of those 10. For example, if you send a newsletter to members in all 50 states and include a donation request inside, you may be illegally fundraising. This might also apply to “donate now” buttons and similar calls to action on your website, depending on your state.
Dive into the details.
With the help of a charitable solicitation registration expert, cover your bases in special situations such as crowdfunding efforts, game nights or other more specific scenarios. Most states have laws governing things like raffles and other forms of gaming and/or gambling.
Final Thoughts
Without charitable solicitation registration compliance, you leave your nonprofit open to all kinds of liabilities, such as fines or damage to your reputation. Making sure your nonprofit can fundraise legally is an essential part of carrying out your mission.
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