Charitable Solicitation State Registration Law Practice

Webster, Chamberlain & Bean has 17 years of experience in registering, or obtaining exemptions from registration for, tax-exempt organizations of all sizes to lawfully solicit contributions in individual states or nation-wide.

Currently, up to 41 states and the District of Columbia regulate the solicitation of their citizens for contributions. State registration requirements for nonprofit organizations have become increasingly demanding in recent years and the filing requirements have increased. With greater media attention on charitable fund-raising, and a number of well-publicized charity fraud cases, state regulators are taking seriously the regulation of charities and levying fines. Financial reports, contracts, and organizational documents filed by charities are now made available to the public and the press.

More states are encouraging consumers to call their hotlines to obtain information on the charities soliciting them. The combination of states encouraging citizens to investigate (coupled with many citizens being "proactive" regarding organizations that are controversial in their mission or constituency) as well as the requirement that contractors (e.g., professional fundraising counsel) register increases the likelihood of unregistered organizations being discovered.

As a tax-exempt organization, are you legally seeking income?

Many tax-exempt organizations are surprised to learn there is state regulation of the solicitation of contributions requiring annual registration and reporting in each jurisdiction. Failure to do so may result in monetary fines and publication on a state's "black-list."

NOT a "charity," NOT COVERED? Think again.

The various laws cover not only traditional IRC 501(c)(3) organizations BUT 501(c)(4) organizations as well as many other tax-exempt entity that solicits from a state's citizens.

NOT asking for "donations," Still NOT covered?

Not true. Even if you are only selling products (t-shirts, key fobs, magazines, etc.) in the state, the majority of the states define a "charitable solicitation" to include any appeal for money; including any sale of merchandise (even if sold at fair market value) by a tax-exempt organization.

If your tax-exempt organization is seeking revenue through traditional, or non-traditional, means in any state, if you wish to be legally compliant, you may need to register with a state agency.

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