Charitable Solicitation Registration – Failing to Register

charitable solicitation registration - failing to register

Most states require charitable organizations, and in many cases their paid solicitors, to register to solicit donations in their jurisdiction. Many organizations are unaware of the need to register which can lead to harsh penalties.

State Attorneys General are typically charged with overseeing and enforcing nonprofit laws in their state. Accordingly, failing to register or maintain registration, through annual reporting or other requirements, can lead to enforcement action by the Attorney General’s Office in each state where solicitation occurs and registration is required.

In all states where registration is required, such requirements are codified into law. This means charities who fail to register or maintain their registration are subject to civil and criminal penalties. Many states make it a misdemeanor to violate registration statutes and implement fees ranging from $2,000 to over $10,000 for violations. In most instances, conviction of a misdemeanor also carries jail time.

States are increasingly imposing late fees and fines on organizations soliciting donations and conducting fundraisers without proper registration. They can also result in the organization being barred from soliciting in the state. Failing to register can lead to audits and investigations into the charity which expand beyond the registration issue into the organization’s overall operations and functions.

Many charities mistakenly believe they are exempt from registration requirements. While almost every state requiring registration carves out exemptions for certain types of organizations, generally the charity will need to file a formal request for exemption which must be processed and approved by the state before that exemption is effective. Exemptions vary greatly between the states, so it is important to closely review each state’s registration laws to determine if a particular organization qualifies for, and the procedure for obtaining exemption.

Charitable solicitation registration requirements can be difficult to track across multiple jurisdictions, but failure to comply with the requirements can result in civil and criminal penalties and investigation into your charity. For those states where you must register to solicit, be sure to thoroughly review the requirements and exemptions, properly register, and maintain registration promptly to prevent unnecessary penalties, headaches, and expenses.

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Kyler Mejia is an attorney (bar pending) with Caritas Law Group, P.C. Kyler advises nonprofit and socially responsible businesses on corporate, trademark, tax, and fundraising regulations nationwide as well as donors concerning major gifts. To schedule a consultation, call 602-456-0071 or email us through our contact form

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