Posted on May 1, 2023
What is Fundraising Registration and Why is It Important
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Fundraising is an integral part of any nonprofit organization’s success. It is their primary means of revenue, and without fundraising, they would struggle to cover expenses, launch new programs, and fulfil their mission. Fundraising can include a variety of strategies, such as grants, individual donations, corporate giving, special events, and more. After you assess which avenues to pursue, you still have to ensure that you meet all of the legal requirements to solicit funds in all of the states in which you will be soliciting. State-specific fundraising registration is the first step toward establishing and maintaining your ongoing compliance.
What is Fundraising Registration?
Fundraising is a regulated activity that requires nonprofits to register their organizations before engaging in charitable solicitation. The vast majority of states have laws regulating fundraising, and therefore, nonprofits who wish to solicit funds in a particular state must fill out the appropriate paperwork and submit the required documentation in order to legally raise funds in that state. It is important to keep in mind that it’s the act of soliciting funds, not receiving funds, that triggers the legal requirement to register. Therefore, in order to fundraise in a particular state, registration requirements must be met regardless of whether or not solicitation results in a donation.
The Initial Fundraising Registration Process
The fundraising registration process can be complicated and time-consuming. Because registration requirements can vary from state to state, the first step is to identify the states in which you already are making a charitable appeal so you can determine the necessary filing requirements. Fundraising registration usually involves several steps including filling out a state-specific registration form, paying a registration fee, and providing supporting documentation. The documentation required can vary from state to state, but usually includes:
- Your last financial statement
- A list of officers and directors
- A copy of your originating document(s), and
- Your tax exempt determination letter from the Internal Revenue Service
You may be required to submit additional documentation depending on the states in which you are registering.
Renewal Fundraising Registration Process
Initial fundraising registration is just one step toward maintaining compliance. Most states also require charities to renew their registration annually and/or file annual reports to maintain. The process of submitting renewal documents and fees can be a time consuming process — especially when soliciting funds in multiple states. However, some of the biggest challenges of keeping up with annual renewals include having to know each state’s renewal requirements, staying informed of new rules and policy changes, and tracking multiple filing deadlines.
The Importance of Fundraising Registration
Registering your nonprofit before engaging in any fundraising activities may seem like a daunting task – especially if you will be soliciting donations in multiple states. Those who have already been operating outside of their home state without registering, and without any consequences, might wonder if it’s really necessary to make the effort. Here are just a few reasons why fundraising registration is beneficial not only for states, but for everyone involved.
Fundraising Registration is Required by Law
Registering your nonprofit before engaging in fundraising activities isn’t discretional, it’s required by law. Failing to register could bring your credibility into question and put you at risk for fines and penalties. When you establish legal compliance with the states, it shows a commitment to accountability, integrity, and transparency with potential and current donors.
Fundraising Registration Protects Donors
In a world that has become increasingly connected through technology, social media, and other forms of communication, the means and methods to solicit funds have also become varied and more accessible. As a result, donors often put more due diligence into confirming that they are giving to a trustworthy organization and aren’t getting scammed. They can do this in one of several ways, but it often involves an online search at least confirming that a nonprofit is registered to fundraise in their state.
Fundraising Registration Builds Trust
Charitable registration laws exist to protect donors, and nonprofits from fraud and abuse. They also aim to ensure accountability and to create a central information source where the authenticity of a fundraising entity can be verified by the public. By properly registering and obeying the law, nonprofits build trust. Likewise, failing to maintain registration can result in a number of consequences. Although uncommon, they can include fines, legal action, being prohibited from fundraising in a particular state, or even the loss of nonprofit status – any of which can be devastating to your cause.
File in Compliance and Show Your Credibility with the Help of Affinity Fundraising Registration
The best way to fundraise legally and build trust with donors is to gain and maintain full compliance with state statutes. However, this is often much easier said than done. Variability between states can make the process complicated and time-consuming – but we can help. At Affinity Fundraising Registration, we provide comprehensive fundraising registration support exclusively for nonprofits. Whether you prefer a do-it-yourself solution or need full support services so you can free up resources and enjoy peace of mind, we’ll help you file in compliance so you can fundraise with confidence!