Many charities are surprised when they first learn that charitable solicitation is regulated. Must charities register as to solicit funds in every state with a registration requirement because their websites are available to users in every state? The Pennsylvania Attorney General thinks so.
Many charitable organizations and small nonprofits get donations from people in other states. They ask if a simple donate button means they must file with the attorney general or the secretary of state.
Charitable Solicitation Law often surprises groups that run web pages and social posts. Fundraising counsel warns that state laws and refunds rules can trigger real costs.
One key fact is that 41 states and the District of Columbia require registration to solicit donations. The Unified Registration Statement and the Charleston Principles can help with multi-state filings, but each state still sets its own registration requirements and rules for paid solicitors.
This post will show you how to check state laws, protect tax-exempt organizations, and follow New York steps like Form CHAR410 and annual Form CHAR500. It will help you decide when to register and how to limit risk.
Key Takeaways
- Forty-one states and the District of Columbia require registration before solicitation, and many treat online donate buttons as triggers for filing.
- The Unified Registration Statement speeds filings and more than 36 jurisdictions accept it, while NASCO’s Charleston Principles guide online multi-state rules.
- New York requires Form CHAR410 and annual Form CHAR500, charges a $25 registration fee, and enforces Executive Law 174-b disclosure rules.
- States regulate professional fundraisers, mandate written contracts, and noncompliance risks penalties and loss of tax-exempt status or IRS consequences.
Charitable Solicitation Laws in the U. S.
U.S. charitable solicitation laws make charities register and disclose key facts about fundraising activities. They must list a taxpayer identification number, file a form 990 or other tax return, and answer questions from the national association of state charity officials.
Registration Requirements (U.S. Laws)Charities must register before they solicit funds in many states. Forty-one states require registration prior to fundraising activities. Organizations often must register in every state where they solicit donations, even if their website reaches donors in other states.
States usually demand registration before any solicitation begins.
The Unified Registration Statement, also called a unified registration form, streamlines charitable solicitation registration and more than 36 jurisdictions accept it. Many states moved registration systems online and the revised Form 990 asks charities to list states where they are registered or exempt.
Donors and regulators can check filings using an employer id number or taxpayer identification number, and some charities link payments to the electronic federal tax payment system.
The national association of state charity officials and the Pennsylvania Attorney General have backed these rules to protect charitable purposes and curb identity theft.
Definition of Solicitation (U.S. Laws)
A solicitation means any direct or indirect request for donations in the United States. States like California cite the California Government Code and the charitable solicitation model act as guides.
The phrase covers online requests, emails, social media posts, and phone calls. Both passive and active online solicitations can count as solicitation under state law.
Many states treat even unsuccessful requests as triggers for charitable registration and disclosure rules. The national association of attorneys general, NAAG, pushes clear standards to help regulators and donors.
Lawmakers use broad language to catch phone solicitation, email blasts, and social media campaigns aimed at a charitable trust or a veterans’ charitable organization. Fundraisers, paid or volunteer, must check state law before they begin to avoid filing problems tied to Form 1040 or claims about a fiduciary relationship.
Disclosures (U.S. Laws)
Many states, including New York, have disclosure requirements for solicitation of funds. They require the charity’s name and a description of its programs in any charitable solicitations.
Donors must see a notice that a financial report is available upon request.
New York Executive Law 174-b requires written and oral solicitations to state that a copy of the latest annual report can be requested or is available on the Attorney General’s website.
These rules shape how charities seek charitable contributions and run campaigns. Groups like the National Association of State Charities Officials, called NASCO, and the National Council of Nonprofits help craft guidance, and the California Attorney General cites the Charleston Principles for multi-state work.
Exemptions (U.S. Laws)
State rules on exemptions to charitable registration vary across the United States. Common exemptions cover religious organizations, educational institutions, and small nonprofits with low annual contributions.
Not all organizations receive automatic exempt status, and groups must meet specific criteria to qualify; the american association of fund-raising counsel and a private sector advisory group have urged clearer standards.
State agencies often require filing and may approve or deny exemption claims. Officials apply criteria case by case, so the process and paperwork differ by jurisdiction. Policy voices like joseph i.
lieberman, john j. schwartz, and david ormstedt have weighed in. They discuss ethical fundraising, Circular 230, sales solicitation for charitable purposes, public safety charities, and ties to the earned income credit and child tax credit.
Professional Fundraisers (U.S. Laws)
Charitable solicitation laws regulate professional solicitors and commercial co-venturers. Lawmakers make these entities register with state agencies and file registration forms before they solicit donations.
Written contracts between charities and professional fundraisers usually must spell out fees, duties, and payout splits.
Regulators set strict rules to prevent fraud and protect the public. They enforce rules with mandatory disclosures and reporting requirements, and many charities use registration forms, compliance software, and state charity websites to track filings.
Key Aspects of Charitable Solicitation Law
Solicitation law can reach a website, an email list, or a contract with a fundraiser. Check state online filing portals, the uniform registration statement, and a simple compliance checklist to see which rules apply across states.
Registration Requirements in 41 states (Key Aspects)
Forty-one states, the District of Columbia, and several local jurisdictions require charity registration. The rule covers both nonprofit organizations and certain fundraising professionals.
States often process filings through the Attorney General or Secretary of State and ask for Form 990 or a Uniform Registration Statement.
Charities must register in their home state and in any state where they actively solicit donations. You must complete registration before you start fundraising; the act of asking for donations, not the receipt of funds, usually triggers the duty.
Up next, the post defines how states treat solicitation.
Definition of Solicitation (Key Aspects)
After covering registration rules in 41 states, we shift to what counts as solicitation. Charitable solicitation covers direct asks by mail, telephone, or face to face, and indirect appeals on websites and social media.
Nonprofit organization websites with a donation button may fall within the scope of the law.
Unsuccessful requests still can create registration duties for a group or a professional fundraiser. The definition also reaches charitable sales promotions and other fundraising activities, like raffles and product drives.
Online platforms and paid fundraisers often must register before they solicit across state lines.
Disclosures (Key Aspects)
State rules often force charities to name their organization and describe its activities on solicitation pieces. Materials must tell donors that financial reports, such as tax returns and audited statements, are available and how to request them.
This duty covers written and oral approaches, including mail, phone calls, and website appeals. Each state can add unique requirements through the state attorney general or charitable registration office, and failure to comply can bring penalties or loss of registration.
Exemptions (Key Aspects)
After explaining required disclosures, regulators move to exemptions. Exemptions differ across states and hinge on specific criteria. Some states exempt religious organizations and educational institutions from registration.
Small organizations with limited annual contributions may qualify for an exemption. Some exemptions arrive automatically; others need an application to the state attorney general or the state filing office.
Exempt status does not always free a group from reporting, and many still file a federal tax return, such as Form 990, or submit simple state reports to charity officials.
Regulation of Professional Fundraisers (Key Aspects)
States require professional fundraisers to register in each jurisdiction where they run campaigns. State charity officials and the Attorney General oversee solicitors who ask for donations on a charity’s behalf.
Laws regulate charitable sales promotions by commercial co-venturers and often mandate written contracts between charities and fundraisers.
Officials monitor fundraising campaigns to ensure compliance and to prevent fraud. Donor tracking tools, online donation platforms, and the Charleston Principles help charities meet multi-state rules and report correctly.
New York Specifics
New York makes charities register with the state charities office and pay a registration fee. The state attorney checks tax filings and fundraiser forms in the online filing portal and uses the Charleston Principles for cross‑border work.
Registration Process and Fees
Most nonprofits must register with the New York State Attorney General’s Charities Bureau before they start fundraising. File using Form CHAR410, the official registration form. The fee is $25.
Registration covers organizations that hold charitable assets in New York and applies to groups that solicit within the state. You must register prior to beginning any fundraising activities, and the Charities Bureau accepts filings through its online filing system or by mail.
Annual Filings
Registered organizations in New York must file an annual report with the New York State Charities Bureau. They must use Form CHAR500 as the standard form. Filing the annual report keeps an organization in good standing with the Bureau.
Failure to file annual reports can result in penalties or loss of registration.
Up next, we look at disclosure rules.
Disclosure Rules
New York law, Executive Law 174-b, makes disclosure rules clear. All written or spoken solicitations must state that the latest annual report can be requested from the organization or is available on the Attorney General’s website.
Solicitation materials must show the organization name and describe its programs in any pamphlet, email, telephone pitch, or online platform.
These rules cover both printed and oral requests, and compliance stays mandatory for every registered organization. Next, review how such requirements affect multi-state and online fundraising.
Online and Multi-State Fundraising
Online fundraisers jump state lines like wildfire, so the Charleston Principles spell out how to treat out-of-state gifts. File a multi-state registration form, use state registration portals, keep your annual information return ready, and watch for flags from state attorneys general and platform rules.
Multi-State Compliance
Charities must register in every state where they actively solicit donations, including via websites. Registration must occur prior to any fundraising activity in each state. The Unified Registration Statement, accepted by over 36 jurisdictions, speeds multi-state filings.
States that accept the URS may still require unique filings, fees, or attachments and the Charleston Principles guide internet solicitation rules. Many state charity offices now use online registration portals for initial forms and annual reports.
Charities should assess contributions from unregistered states and weigh those totals against registration costs. If contributions from a state exceed registration fees, register there before fundraising begins.
Website disclaimers can help limit exposure, but they may not prevent all state filing duties.
Charleston Principles
After Multi-State Compliance, the Charleston Principles offer guidance on online giving across states. The National Association of State Charity Officials, NASCO, formulated them. They act as non-binding guidelines on when online solicitation triggers state registration.
Registration is required if a charity is domiciled in a state and solicits contributions online, or if its principal place of business sits in that state.
Non domiciled charities must register if they target a state’s residents or receive substantial donations from that state. NASCO separates interactive sites from static sites to set registration tests.
Some states still treat a passive donate button as a triggering act, which can differ from NASCO’s intent. The Principles help charities that raise funds across state lines, but they remain non-binding.
The Three Types of ‘Roles’ Regulated by Charitable Solicitation Laws
Charitable Organizations
501(c)(3) organizations are considered charitable under state Charitable Solicitation laws and can fundraise; however, most states also have a clause defining non-501(c)(3) organizations as charitable and able to fundraise. Qualifying as charitable if you are not 501(c)(3) can be very complicated and every state addresses this differently. If you are not a 501(c)(3) and you think you qualify, you must consult your local laws before you act.
Professional Fundraiser
This means a person who ‘plans, conducts, manages, carries on, advises or acts as a consultant’ in connection to a charitable solicitation campaign. Professional Fundraisers do not actually solicit donations.
Professional Solicitor
This means a person who actually goes out and solicits donations. They are responsible for asking for donations, taking donations and making sure the donations get deposited into the charity’s bank account. Many states require Professional Solicitors to file recurring financial reports with the state.
Although these are the typical terms and definitions used, they are not universal. For example, Arizona calls Professional Fundraisers Contracted Fund Raisers and allows them to ‘actually solicit donations.’ Whereas some states, like Minnesota, do not distinguish the two roles and conceive of only a Professional Fund-Raiser who can both consult and solicit.
For the states that do regulate (as of January 2013, 8 do not, including Delaware, Idaho, Montana, Nebraska, Nevada, South Dakota, Texas, and Wyoming), the broad requirements are pretty consistent. Below is a summary, with an emphasis on Arizona.
Conclusion
6. Conclusion: You learned how state law, online rules, and registration shape charity fundraising. Use the Unified Registration Statement and simple website disclaimers to cut red tape.
Failing to register can risk IRS status and lead to fines. Check the Charleston Principles, registration form CHAR410, annual report CHAR500, and your state Attorney General portal for clear steps.
Start small, test donation buttons, and act now to protect donors and your mission.
FAQs
When do I need to register?
Whether you are a charitable organization, a professional fundraiser or a professional solicitor, you must register with the appropriate state agency prior to making any solicitations. Penalties in Arizona range from a class 1 misdemeanor to a class 6 felony and can be accompanied by up to a $1000 fine for each violation.
Who do I register with?
States that regulate Charitable Solicitations have a state agency that manages registrations. Commonly it will be the state’s Attorney General, Secretary of State, or Department of Consumer Protection. Most states have forms online. In Arizona, you can find the necessary forms here.
What are my responsibilities as a charitable organization?
You must register with your respective state agency, before soliciting [your] first contribution, whether through a contracted fundraiser or otherwise.[1] Late registrations are subject to a fine (in Arizona it is $25, other states vary). Be sure to check with your state’s governing agency to see what forms are required, but have your IRS tax-exempt determination letter ready because that will almost surely be required.
You must also pay attention to the conduct of the professional fundraisers and solicitors you hire – they may be subject to stringent regulations. For example, in almost every state, the fundraiser must disclose certain information to each potential donor such as, on whose behalf they are soliciting donations.
Remember, if your state conceives of professional solicitors, they cannot solicit or be in custody of donations, so be sure they aren’t. Professional fundraisers must deposit secured donations in the charitable organization’s bank account within a set number of days and a receipt must be given to the donor. For example, in Arizona, they must make the deposit within seven (7) days of receipt.
Finally, professional fundraisers, in almost every state including Arizona, are required to file financial reports with the governing state agency and the charitable organization either within 90 days of the campaign’s conclusion or, if the campaign is longer than one year, within 90 days of the campaign’s anniversary. Check with your state or with a qualified attorney to know the requirements in your state.
What will registration cost?
Most states require registration fees and a bond to be filed with the state. Fees can apply to the charitable organization, the professional solicitor and the professional fundraiser. At the time of this writing, Arizona does not charge charitable organizations a registration fee; however, California requires a $25 fee. Washington charges charitable organizations $60 for an initial registration and $40 for a renewal.
Registration fees for professional solicitors can range anywhere from $10 to $1000, Arizona charges $25. Finally, professional fundraisers, because they are in custody of donations must secure a bond and record it with the state. If the state requires a bond, the amount can vary from $10,000 to $50,000. Arizona requires a $25,000 bond.
What are my ongoing responsibilities?
Most states require that charitable organizations re-register annually. Check with your state to see the deadline for re-registration, keeping in mind late fees may apply. In Arizona, charitable organizations must file an annual registration form between September 1 and September 30 every year following their initial registration year. It is your responsibility to re-register; the state will likely not remind you.
Most states require the contract entered into between the charitable organization and the professional solicitor or fundraiser be filed with the state. Any material change to that contract must be reported to the state’s governing agency within a pre-determined set of time “ Arizona requires reporting within 60 days of any material change.
Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on corporate, tax, and fundraising regulations nationwide. Ellis also advises donors with regard to major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.