With the increase of online commerce and online banking, it is no surprise that online giving has increased. A recent study found that online donations increased by 13% from 2014 to 2015, and monthly giving increased by a whopping 32%. The web has opened a vast array of fundraising initiatives from peer to peer requests, to online matching drives, Facebook campaigns, Pinterest boards, online auctions, video presentations, and of course direct email solicitations to mention just a few. Using these approaches, online fundraising has provided an efficient and effective tool to build support for their programs.
At the same time that the web has become a fundraiser’s friend, it has become a fertile ground for scams of all types. In the face of fraudulent fundraising practices, many states have enacted nonprofit solicitation registration laws to ensure some basic regulation of nonprofit solicitation. At the federal level, charities seeking to accept donations which confer tax deductible status require an organization to provide annual reports of their status and activities. Most, but not all states, require state charity registration and regular reports of nonprofits which solicit or accept donations within their state. It is here where the challenge for organizations takes a toll. Each state has established and maintains its own set of nonprofit solicitation laws, regulations and policies for the regulation of charitable organizations which solicit in their state.
A common misconception is that an organization must register with the federal government and only in the state in which it maintains its headquarters. The fact is that each organization must comply with the state charity registration laws in EVERY STATE in which it solicits donations or receives donations. To be clear, this means that if your organization website has a “donate now” button you are likely to be required to register in all states that have state charity registration laws.
While there has been some attempt to create a Unified Registration Statement, now accepted by 31 of the 39 states and the District of Columbia which require state charity registration, in most instances, it covers only initial registration and does not cover annual renewals. Further, 16 states require additional information beyond that conveyed by the Unified Registration Statement.Each state defines conditions under which some organizations are exempt from reporting and disclosure requirements. The National Association of State Charity Officials (NASCO) developed the “Charleston Principles” to help organizations decide when their website create a responsibility to register. However, several states do not follow these principles and they are not binding on any state.
In sum, the internet has provided a vast array of creative and effective tools for efficient fundraising for nonprofit organizations. Governments at the federal and state level has stepped in to ensure some level of protection against scammers and in doing so have created a regulatory maze of state charity registration requirements.
NPSS Corporation provides consultation in establishing compliance for your organization with state charity registration laws, organizes the required reports and ensures timely submissions. Take full advantage of the fundraising value of the internet and email communication and let NPSS Corporation with its low fixed rate pricing, ensure worry free success.