Registering to fundraise in your state: a guide for small charities

This guide is for anyone at a small charity who is about to ask the public for money: a mailing, a "Donate" button, a gala, a crowdfunding page. In many states, a charity must register with a state office before it asks. This is called charitable solicitation registration, and it's separate from your IRS tax exemption and from your state's yearly corporate report. Our compliance stage introduces it. This guide explains who needs to register, how online fundraising fits in, the kinds of exemptions states offer, and how to find your own state's rules.

The basics

• Most states have a law. The IRS says approximately 40 states have charitable solicitation laws, and that these laws generally require a charity to register before it asks the state's residents for contributions.
• "Soliciting" means asking. A letter, an email, a phone call, a website "Donate" button, an event or a crowdfunding page can all count.
• Rules differ from state to state. NASCO, the National Association of State Charity Officials, says the laws and the registration and filing requirements differ from state to state. NASCO's members are state offices, such as attorneys general and secretaries of state, that oversee charities.
• Many states exempt some charities. The IRS says most of these laws exclude or exempt certain organizations. Which ones depends on the state.
• Holding money can count too. In a few states, such as California, New York and Illinois, holding charitable assets can also mean you must register, even before you ask the public. See our state guides.

What exemptions can look like

Every state words its exemptions differently, so read your own state's rules. Here are three real examples, to show the kind of thing to look for. They are not a guide to any other state.

Notice the patterns: a dollar limit, a rule about paid fundraisers, and sometimes a form you still have to file even when you're exempt. Being exempt doesn't always mean doing nothing.

Fundraising online and in other states

A website "Donate" button can be seen everywhere, so where do you have to register? In 2001, NASCO's board approved the Charleston Principles as advisory guidelines for states. They are not law, and NASCO says the laws and how states apply the principles vary. But they explain how many regulators think about online fundraising:

• Your home state. A charity whose main place of business is in a state, and that asks for donations online there, should register in that state.
• Other states. A charity based elsewhere should register in a state if its offline activity there (such as mailings, phone calls or events) would already require it, or if it takes donations through its website and either specifically targets people in that state, or receives donations from that state on a "repeated and ongoing basis or a substantial basis".
• Email counts like mail. Asking by email is treated like asking by phone or post, if you knew or should have known where the person lives.
• Local charities. A charity that works only in a limited local area, and whose website makes that clear, isn't treated as targeting other states just because a few gifts arrive from outside.

The principles suggest that states set their own numbers for "repeated and ongoing" and "substantial", so check each state where you actively ask for money.

How to find your state's rules

1. Check our state guides. For California, Florida, Illinois, New York, North Carolina, Pennsylvania and Texas, our state guides list who must register, exemptions, fees and renewal dates, each with its official source.
2. Use our compliance calendar. The compliance calendar lists the charity registration and annual report deadlines we could confirm for your state, each with a plain explanation, its official source and the date we checked it. You can add the dates to your own calendar.
3. Go to the official office. Our directory lists every state's charity regulator, and NASCO keeps a list of state charity regulators with contact details. Read the office's own pages: they are the rule, and ours is only a summary.
4. Ask the office. NASCO says it doesn't give legal advice and encourages charities to consult their own counsel. You can contact the state office with questions about its forms.
5. Write down what you find. Note the date you checked, the web address and what it said. Rules change.

Other people who may need to register

• Paid fundraisers. Many states also regulate people or companies a charity pays to raise money. Alaska, for example, requires paid solicitors to register. If you hire a fundraiser, check that they're registered where required.
• Fiscally sponsored projects. If your project raises money under a fiscal sponsor, ask the sponsor how its registrations cover you. Our guide to fiscal sponsorship explains how sponsorship works.

Keep it current

Registration usually isn't once and done. Many states ask for a yearly renewal or report, sometimes with financial information or a copy of your Form 990. Put each date on a shared calendar, name one board member to own it, and keep copies of what you filed. If you raise money from a new state, check its rules before you start.

Your registration checklist

• We found our home state's charity regulator through our directory or NASCO.
• We read our state's official rules on who must register, and any exemptions.
• We registered before asking for donations, or filed any exemption notice our state requires.
• Our website says where we raise money, if our work is local.
• We checked the rules in any other state where we actively ask for gifts.
• Any paid fundraiser we use is registered where required.
• Our renewal and report dates are on a shared calendar, with one owner.
• We saved the date and address of every official page we relied on.