Understanding Fundraising Law: At the State Level
Registering. Perhaps the most difficult and time-consuming - particularly with respect to a fundraising campaign that appeals to residents in a number of states - is complying with the plethora of state and local fundraising laws. More than 42 states and untold local jurisdictions have enacted special rules for fundraisers. Most of these regulations require organization to register with each state in which they plan to solicit donations before they begin soliciting funds.
For example, in Washington, D.C., organizations are required to register and receive a certificate of registration at least 15 days prior to soliciting contributions. In Maryland, organizations are required to register unless they do not receive contributions in excess of $25,000 in a year and all fundraising activities are performed by volunteers, not paid staff. Most states do not require organizations to register if they are only soliciting donations from their members.
Information frequently required for registration includes:
- Names and addresses of officers, directors, and trustees;
- A recent financial report;
- A description of the organization’s purpose(s); and
- Information on how the funds are intended to be raised, including whether any outside fundraising professionals or consultants will be used.
Disclosures. Following registration, organizations often are required to file an annual report with the state. At the time of solicitation, specific disclosures, such as the fact that information about the charity is on file with the state or that professional fundraisers are being used is often required. States may not require an organization to disclose the amount or percentage of funds rose that will be targeted for fundraising expenses.
To make compliance easier, some 35 jurisdictions (34 states and the District of Columbia) have come together to develop a Unified Registration Statement. Using this one form, available at www.multistatefiling.org , your organization may register in these 35 jurisdictions. Before you get started, however, it’s a good idea to determine the states in which your group will be raising funds from the public and look at the registration and disclosure requirements of those states (see the appendix of the Unified Registration Statement for state-by-state information).
Fundraisers may also be subject to a variety of other state laws, including prohibitions on fraudulent advertising. In some states, a fundraising appeal needs only to be capable of deceiving to violate these laws. More information about these statutes may usually be obtained by contacting the state attorney general’s office.
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Fundraising: Understanding Fundraising Law