Like many jurisdictions, Washington regulates charitable donation solicitations. In Washington, charitable solicitation rules are codified in the Charitable Solicitations Act, Chapter 19.09 of the Revised Code of Washington (the “Act”). The Act aims to promote transparency, protect consumers, and build trust and confidence in organizations soliciting funds from the public for charitable purposes. The Act governs charities, professional fundraisers, commercial co-venturers, and others involved in charitable solicitations.
Registration
The Act requires most charitable organizations and certain individuals involved in fundraising to register with Washington’s Secretary of State before soliciting donations. Generally, all charities, except for churches, their integrated auxiliaries, and political organizations, soliciting or collecting contributions from the general public are required to register.
The charity’s initial registration application must include the following information:
- the charity’s name, address, and telephone number;
- the name(s) under which the charity will solicit contributions;
- the name, address, and telephone number of the charity’s officers and directors;
- the names of the charity’s three highest paid officers and/or employees;
- a statement of the charity’s charitable purpose(s);
- whether the charity is exempt from federal income tax (including a copy the charity’s determination letter);
- the name and address of the entity that prepare, reviews, or audits the charity’s financial statements;
- whether the charity or its officers or directors (or other key individuals) have been involved in any legal actions; and
- a solicitation report for the charity’s prior fiscal year.
Charities must renew their registration each year and report changes to key information to the Secretary of State. Charities must also maintain records relating to their solicitations for at least three years, including contracts with professional fundraisers.
In most cases, charities raising less than $50,000 and who have no paid officers or employees are not required to register. However, those charities can still opt to register if they so choose.
What Happens If I Don’t Register?
Failure to register can result in serious penalties for the charity. If an unregistered charity is found to be soliciting donations in Washington, the charity may be subject to a $1,000 fine per violation. Organizations found to be in violation of the Act will be guilty of a misdemeanor, carrying a fine of up to $5,000 and other penalties. Further, violations of the Act, including failure to register, are deemed “unfair practices” under Washington’s Consumer Protection Act, which may result in additional penalties. In egregious cases, the Washington Attorney General may get involved.
What If My Charity Is Not Domiciled in Washington?
Registration is required where a charity is soliciting donations in the State of Washington. Even if the charity is located in another state, it will likely still need to register if it is actively soliciting donations from Washington residents.
Best Practices for Compliance
Regularly Review Registration Requirements: Ensure that your charity’s registration is current and that any required solicitation reports are submitted on time. Also make sure to maintain and safeguard the charity’s records relating to its solicitations for at least three years.
Be Transparent in Communications with the Public: Ensure that donors are informed about the nature of your charity, whether donations are tax-deductible, and how their contribution will promote the organization’s charitable purposes.
Engage Knowledgeable Professionals: Charitable solicitation rules can be tricky and nuanced. While this blog only discusses how the Act may apply to charitable organizations, the Act also governs professional fundraisers, commercial co-venturers, fundraising counsel, and others. Make sure to engage with a knowledgeable professional experienced in charitable solicitation registration before you begin soliciting in Washington.
Conclusion
The Washington Charitable Solicitations Act plays a crucial role in ensuring transparency, accountability, and consumer protection in charitable fundraising. Nonprofits soliciting donations in Washington must be aware of the Act’s requirements and take proactive steps to maintain compliance. By registering with the state, adhering to reporting requirements, and being transparent in solicitation practices, charities can build trust with donors and avoid legal pitfalls. Maintaining compliance not only protects your organization from penalties but also strengthens your charity’s reputation as a responsible and trustworthy nonprofit.
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Kyler Mejia is an associate (bar admission pending) with Caritas Law Group, P.C. Kyler counsels nonprofit and socially responsible businesses on corporate, trademark, tax, and fundraising matters nationwide and advises donors concerning major gifts. To schedule a consultation, call 602-456-0071 or email us through our contact form.