Contact Us Today


877-320-2299 Toll-free
Team{AT}FundraisingRegistration{DOT}com

 

 

Get Registration Tips


The legal requirements for fundraising registration are ever changing. As a FREE service to the nonprofit community, we gladly provide registration tips and updates both to our customers and to do-it-yourselfers.

Get Registration Tips & Updates
Email:

checklist

Frequently Asked Questions

Answers to Common Fundraising Registration Questions

Every charity is unique, but this information applies to most everyone.

 

Do all states require registration?
No. Currently 40 states and the District of Columbia require charitable solicitation registration. Eight more may require corporate business licenses, known as Certificates of Authority to Conduct Business, in order to fundraise there. Four states have no fundraising registration requirement whatsoever. View this map to see which states require registration.

Does the IRS require us to register state-by-state for fundraising?
Not explicitly, but essentially yes. The IRS requires of all charitable organizations with income of $25,000 or more that they file a Form 990 or 990EZ tax return. As of tax year 2008 that form requires each charity report:

  1. A list those "states with which a copy of this Form 990 is required to be filed" (Part VI, Section C, 17), and

  2. A list of all those states in which the organization is registered (Schedule G, Part I, 3).

Most states require a copy of the Form 990 among registration materials, therefore #1 is a roundabout way of publicly reporting where are you required to register.

Why do states require the registration of charitable organizations?
Charitable registration laws exist to protect a state's residents, corporations, and foundations from fraud and abuse, to ensure accountability, and to create a central information source where the authenticity of those organizations can be verified by the public.

What kind of organizations have to register?
Any charitable organization that makes a charitable appeal in a state requiring registration must register in that state, regardless of whether that outreach results in a donation from that state. The definition of a "charitable appeal" varies from state to state, some of which define it quite broadly.

Are there exceptions to who must register?
Yes, on a state-by-state basis. Common exceptions (but not in all states) may include colleges and universities, hospitals, foundations of educational institutions and hospitals, churches, and organizations with gross income from all sources of less than $25,000. Membership-based exemptions are very narrow and it is difficult for most member organizations to qualify for them.

When are organizations required to register?
All charities are expected to register in each appropriate state prior to soliciting for support from within that state.

Does having a donate button mean I’m soliciting and need to register?
Not necessarily, but it can feel that way. It’s nuanced, and depends on both the state and the way in which you communicate with your constituents. Generally, the states will fall into one of 3 categories:

  1. The Reasonable Approach: Three states follow a modified version of the Charleston Principles: CO, MS, and TN.

  2. The Far Extreme: a few states consider the presence of a donate button to be a direct solicitation because they take the stance that someone from their state could stumble across your website and be solicited.

  3. Somewhere in the Middle: most states won’t consider the mere presence of a donate button to be a direct solicitation. But, if your nonprofit is distributing information in these states with a call-to-action that drives visitors to your website (example: Learn more about our work at mydomain.org) and there is then a donate button present on your website, that might well be considered an "indirect" solicitation that could trigger the requirement to register.

Confused? This article is informative, and we're here to help.

Does email fundraising trigger a registration requirement?
Yes.

Without registering, we have been soliciting outside of our home state for some time.  Should we still register?
Yes! You could be found to be operating illegally in those states and may be subject to a variety of fines and penalties by continuing to solicit without registering. We have seen some organizations choose to cease soliciting in some states to avoid triggering the requirement to register, but Affinity works on your behalf with state regulators to try to minimize any possible fines for those who wish to do the right thing and register late and move forward being in compliance.

What are the benefits of registering?
Registering means you're obeying the law. When you come into legal compliance with the states it shows a commitment to accountability, integrity, and transparency with potential and current donors. Compliance can be used in your marketing when using our Seal of Compliance as an authentication badge on your website. Most importantly, it protects the reputation of your organization, and the passion and commitment to the mission that staff, volunteers, and supporters that value you and help make your organization everything it is.

What are the penalties for failing to register?
Again this varies from state to state. Possible penalties include:

  • Civil administrative penalties, including being prohibited from fundraising in a state,

  • Fines up to $25,000,

  • Officers and board members can be held to be personally liable for a charity’s lack of legal compliance as well as be prohibited from serving on the board of another nonprofit,

  • Loss of nonprofit status,

  • A lawsuit by the state for the return of all funds raised in a state, and

  • Loss of donor trust and damage to your reputation.

Which states charge late fees or require back-filings if you have previously solicited without registering? Read this article.

What does it take to register?
In most states it is the Attorney General’s office who oversees registrations and requires at minimum the completion of an application form, together with your last financial statement, a list of officers and directors, a copy of your originating document(s), and the organization's tax exempt determination letter from the Internal Revenue Service. However every state is unique and many have their own requirements, including a bifurcated filing with the Secretary of State’s office as well.

Is registration a one-time event?
No. When a nonprofit gets registered, they enter into an annual, legal obligation to maintain that registration unless and until they submit a request to withdraw from filing. After the initial registration, most states require submission of an annual report and/or a renewal registration. Due dates vary from state to state and can be fixed, on the anniversary of filing, or calculated by an organization’s fiscal year end. Annual renewals are as much work as — and often more than — the initial registration.

Is there one central, public location where we can register for all or most states at once?
No. Only third-party filing services such as Affinity provide that option.

What is the Unified Registration Statement (URS)?
The URS is a form originally accepted by about 30 entities for initial registration, but currently only accepted by a handful of states. Little differs from state to state on this form, but a number of states require supplemental forms be submitted in addition to the URS. Nowadays for annual renewals and reports most states have their own form and very few will accept renewal using the URS. In a nutshell: filing with the URS is a good way to mess things up and potentially get yourself into hot water with the states – it’s best avoided unless working with a professional. See this article on how the URS is outdated.

How much does registration cost?
The total cost of registration is incurred through state filing fees, ancillary expenses, service fees, and time investment. State fees vary by state and are sometimes scaled by the nonprofit's gross income from all sources, but range from $0–$2,000. Smaller or brand new nonprofits might pay as little as $1,700 in state fees to register in 40 entities. Very large nonprofits could pay as much as $6,500. Stem to stern, the total cost of registration for a medium-sized organization when working with a third-party filer can cost in the ballpark of $10,000–15,000 annually. What you may save in service fees you spend in time.

How can Affinity help me?
Let’s talk! Contact us for a conversation about your unique needs, fundraising activities, staff resources, what to expect, and how to weigh your options. We're here to help.