Does Fundraising Online Require Nonprofit State Registration?

Running a nonprofit organization, or managing fundraising registration compliance, might lead you to wonder what the registration requirements are for online fundraising efforts. Like many groups, you may have a “donate” button on your website, or send materials promoting your website to residents in multiple states. Do you really need to register in every state in which you may reach a resident?

If your fundraising efforts are primarily concentrated online, and especially if you are soliciting multiple times to the same recipients, then the short answer is yes, it is recommended to register in every state to which you send outreach. The reason is that, in most cases, it is the soliciting, not the actual receipt of funds, that triggers the registration requirement.

However, there are some exceptions that depend both on the state in question as well as the amount of funds you actually raise from your online solicitations. This post will outline best practices and recommendations so you can make the best decision for your organization. Remember, no matter what your requirements are, Affinity’s extensive knowledge and innovative resources have helped hundreds of nonprofits get their fundraising compliance situations figured out, and we’re happy to do the same for you.

Fundraising Registration for Online Campaigns

Legally soliciting donations online requires more than just a compelling message and a user-friendly donation page; it requires knowledge of each state’s registration requirements. Many states have income thresholds for online fundraising that will require the organization to be registered once surpassed. Organizations can (and often do) continue to solicit funds online beyond this threshold (as it’s often based on nationwide contributions, and not state contributions), but it’s technically illegal, and while states do have limited funds for investigation, most feel it’s better to be on the safe side and register than risk a penalty and hit to your organization’s reputation and legal standing.

What Are the Risks of Not Registering?

While it’s true that unregistered online solicitation goes on, and states have limited investigative resources, the severity of this risk of noncompliance depends on the state. Some states will give only the proverbial “slap on the wrist” (usually a written warning or relatively small fine) while others have harsher penalties, including felonies and thousands of dollars in fines.

What a nonprofit (or a managing organization) chooses to do in these situations depends on the amount of legal risk they are comfortable with, and how valuable their contact list is in a given state. However, failing to register can result in more than just fines; it can also impact your organization’s reputation and hinder future fundraising efforts. Although it can be time-consuming (especially when done without professional help), registration keeps your organization honest while improving your reputation and trustworthiness. 

The registration process involves submitting, sometime annually, an application that includes details about your nonprofit’s mission, financials, and fundraising plans. It’s highly encouraged that you seek legal counsel when considering the noncompliance risks to your organization, and make a registration strategy. 

Situations Where Online Fundraising May Not Require Registration

In the U.S., most forms of online fundraising generally require registration with state authorities, but there are some nuances to consider:

1. Small-Scale Campaigns: In some states, if a fundraising campaign is relatively small and does not reach a certain monetary threshold, it may not require registration. The threshold varies by state, and each state has different rules about what constitutes a “small-scale” effort. 
2. One-Time or Limited Activities: Some states allow for limited, one-time fundraising activities without requiring full registration. For instance, a charity might be able to conduct a single event or campaign without registering if it meets specific criteria set by the state.
3. Exemptions for Certain Types of Organizations: Religious organizations, accredited educational institutions, hospitals, foundations thereof, and other types of organizations might be exempt from registration requirements in specific states, depending on their mission and structure.

This map provides a visual representation of states with any registration requirements, and links to their state websites. Qualifying for exemptions, if they exist, can vary significantly by state. It’s important for any nonprofit organization to assess their own fundraising activities to determine where their online solicitations may be triggering registration requirements. 

How Affinity Can Help

Navigating the complexities of online fundraising registration is tedious, filled with daunting tasks and details that must be monitored for every state where you are soliciting, and will consume time and resources you may not have to spare. 

Many nonprofits choose to work with third-party registrars and platforms to create a strategy specific to their organization, simplify the registration process, and keep their state filings up-to-date. Consulting with a professional, like Affinity Fundraising Registration, can help your organization comply with all applicable laws and regulations year over year. 

Affinity streamlines the registration process with our in-depth knowledge of state-level registration requirements and innovative digital compliance tools. 

Our flagship Full Support Service provides a complete compliance solution. Powered by the Affinity Single Portal®, our innovative platform centralizes your registration process, making it easier to manage and monitor. You submit your data once annually, and we handle the filings across multiple states. In addition, you receive a widget for your website that signifies compliance, and links to state-mandated disclaimers, assuring online donors of your organizations transparency and that their contributions to you can be made confidently.

By taking the hassle out of state-level registration, Affinity gives you the all-important peace of mind of knowing that your online fundraising efforts are fully compliant. Contact Affinity today to talk more about your specific situation and get started on your journey to fully compliant online fundraising.

Disclaimer

The information provided on this page is intended purely for educational purposes and should not be construed as legal advice. Every effort has been made to ensure the accuracy and completeness of the information up until the published date. However, the interpretation and enforcement of these laws can often be complex, and the specifics of your situation can impact how the law applies.

Affinity Fundraising Registration is not a law firm and, as such, cannot provide legal opinions. For all specific legal questions or concerns, we strongly recommend consulting with a qualified attorney who is experienced in nonprofit law and compliance. 

By using this site, you acknowledge that Affinity Fundraising Registration holds no liability for any consequences, legal or otherwise, resulting from actions taken based on the information provided on this page.