.Fundraising Compliance

Non-profit work can be fulfilling and contribute to important causes to make our world a better place. At Concerto Law, we appreciate the good, honest work of non-profit organizations and want to make sure your organization doesn’t find itself in trouble.

There are several “hoops” to jump through to make sure your non-profit is up to standards and running legally. It’s not as simple as registering and doing as you wish from that point forward.  Let’s look at some scenarios.

Know when you need to register to solicit donations

Many states require nonprofits to register before soliciting donations in the state.  The National Council of Nonprofits has a guide to help you better understand the filing requirements in each state. Some states don’t require you to register and some states only have limited registration requirements.

If you look at where your donations are coming from and see just one or two small donations from a state, you won’t have to worry about registering there. It’s just the states where you’re getting heavy contributions from or states where you’re soliciting donations from. The registration process can cost you time and money.  You might not need to register in every state.  Begin by focusing on states where you plan to operate regularly or receive the most donations.

Obtain the proper fundraising licenses

The registration process may not be the end of your filing requirements. Some states require you to get licenses for specific activities like holding online raffles (this is considered gambling in some states and is either illegal or restricted).

Pennsylvania requires a Small Games of Chance License for many popular fundraisers.  As another example, North Carolina only allows two raffles per year per organization and has strict limits on the total cash prizes allowed.

The path your organization takes to solicit and raise funds will determine the licenses you need.

If you’re just sharing a generic donation link and contacting potential donors, you will likely just need to register where required and be done. Anytime your organization commits to other means of fundraising, it’s important to check with your attorney to make sure you’re not violating the law.

Keep up with changes in the law

Non-profit laws and regulations constantly change. The government wants to ensure charitable work is just that and not a front for nefarious activities. Bad actors often give non-profits a bad name by using these organizations as fronts for money laundering.

Failure to keep up with changes in the law could be put your organization’s future at risk.

For example, California recently stepped up its efforts regulate online donations solicited by nonprofits.  Lawmakers are doing so to protect consumers from those bad actors mentioned above.  Many organizations not based in California must comply with this law.  If your organization intentionally targets California residents for donations, you should take steps to ensure compliance before the changes take effect on January 1, 2023. It’s possible other states will follow California’s lead on this particular law.

Work with an attorney

Your non-profit should have an attorney you work closely with to make sure you’re in compliance with these and other regulations.

At Concerto Law, we can help your non-profit get off the ground and running smoothly. We take the hassle, time commitment, and frustration out so you can focus on doing what you love. Contact us today and receive legal solutions that break through the noise of bad internet advice.