Premium Exhibitor
Maia Lee
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, to fundraise there. Four states have no fundraising registration requirement whatsoever.
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.
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.
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.
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.
