Did you know that your organization might have to submit an application to raise funds?
It is a common and understandable assumption that once you receive your Determination Letter from the IRS granting your organization 501(c)(3) status, you are in the clear until you have to file your 990 at the end of the year.
However, if you are an organization who will be partaking in fundraising (as most organization’s do), then you will need to know your states fundraising rules and regulations so you remain compliant and do not have to worry about any legal backlash.
The goal of this article is to explain the gist of fundraising compliance and what that means; however, be aware that every state has different requirements. The majority of states (41 to be exact) have fundraising applications that you must complete in order to legally be allowed to solicit funds for your nonprofit. This is necessary for every sort of fundraising - by phone, email, in-person, online, etc. These applications are generally pretty short and simple, and often you will need to renew your charitable solicitation registration every year. Again, this varies state by state, so be sure to check your Secretary of State department website for your specific fundraising application
So, what if you are fundraising in multiple states or...online?!
The most straightforward way to handle this situation is to apply for registration in every state. However, that can be very time-consuming and expensive. That is why an application called the Unified Registration Statement was created, and is accepted by most states. This is a document that was created as an alternative to filling out each state’s registration application. You can find this application, along with instructions for using it here:
It is important for fundraising nonprofits to follow all of the necessary steps for fundraising compliance, in order to avoid:
- Losing your right to solicit funds
- Revocation of your tax-exempt status, and
- Lost grants or donations
A simple Google search for your state’s fundraising registration can lead you towards operating as a A+ compliant organization.