Your nonprofit may be aware of its obligation to register for fundraising purposes in its own state (38 states and the District of Columbia currently have this requirement), but did you know that if your nonprofit is asking for donations from potential donors in other states the nonprofit may be required to register in those other states as well? Here’s why charitable solicitation registration in multiple states may be in your nonprofit’s future, if it’s not already part of your nonprofit’s annual filing routine.
First and foremost, we live in a mobile society. People move.
Example: Someone who is a regular annual donor to your nonprofit may move to one of the states where charitable registration regulations require nonprofits to register with the state prior to engaging in fundraising activities. As soon as your nonprofit decides to send its annual appeal letter to that long-time donor, your nonprofit needs to register in the state where the donor lives. (Unfortunately, each state has different laws, so there is no uniform filing process. In some states, registration is required before you can solicit there, while in other states the registration requirement is not triggered until a certain amount of donations are received from residents of that state. Different states require different filing fees and have different exemption rules, too.)
Second, our electronic stuff moves with us.
Example: Instead of sending out fundraising appeals via snail-mail, your nonprofit may send out appeals for donations via social media, or an electronic newsletter, or even text-to-give messages. There are multiple mobile apps that facilitate fundraising. As soon as someone sends out a solicitation through a digital appeal, that can trigger an obligation for your nonprofit to register in another state. State laws don’t address social media solicitation directly, so your nonprofit will have to decide for itself how active its solicitations are in targeting residents of various states.
Third, multi-state filing will eventually become easier.
Several state charity officials have publicly announced their intention to facilitate a future electronic charitable registration system through a website portal that nonprofits will be able to use to register in multiple states.
In the meantime, the National Council of Nonprofits notes that SimpleCharityRegistration.comsoftware offers an alternative option for nonprofits to register in multiple states (and the first state is free!). Contact your state association of nonprofits to inquire about discounts that may be available.
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