Assessing Charitable Solicitation Registration and Reestablishing Compliance

Navigating charitable solicitation registration per state might feel like walking in a maze. If you’ve hit a dead-end, whether that’s internal bandwidth maxed or external dissatisfaction with a service provider, it’s never too late to try a different direction. The legal obligation of compliance isn’t going anywhere, and staying compliant is not only a requirement for you, it also reassures donors.

If your current setup isn’t working and filings are slipping through the cracks, what do you do? First and foremost, start with an assessment of the situation. All consequences of noncompliance will land on the nonprofit, and no team should be more motivated than the nonprofit itself to double-check registration statuses and ensure all requirements have been met year after year. If that task seems daunting to you, below is a guide on how to navigate the cost of noncompliance when a partnership doesn’t work out as smoothly as you had hoped.

How to Check Your Nonprofit’s Charitable Solicitation Compliance Status

Starting with the good news, if your internal team and/or service provider has stayed on top of deadlines, changing regulations and organizational changes, the assessment process will feel fairly straightforward. A little leg-work will be required to:

Track down a list of states in which you’re currently or plan to start soliciting,
Narrow down which of those states have registration requirements for which your nonprofit qualifies, and
Contact those state regulation agencies (usually the Secretary of State or Attorney General) to make sure you’ve met their expectations for registration—this can be as simple as searching your EIN in online state databases, where available.

The bad news is that very few nonprofits who are already feeling overwhelmed by fundraising registration regulations can expect to be in perfect compliance. When all is going well, you tend to forget about the burden of registration and trust your provider to handle the details. It’s only when compliance has gone downhill that you realize how complex this system can get! If you find yourself in such a pickle, Affinity Fundraising Registration can help. Fill out our free estimate request to learn more about the services we provide to nonprofits needing state charitable solicitation registration assistance.

Things to Consider with Registration Service Providers

Not all service providers are created equal. If you’ve hit a pivot point with your current compliance setup, you may wish to consider:

The history of the registration provider and company values
How long they’ve been in service and if there was a transition in leadership or ownership
What service levels they provide and how smooth is their onboarding process
If they have designated customer support teams and how quickly they respond
If they utilize latest technological tools, and if so, what safe-guards they have in place to ensure the security and reliability of the tools they use
How the provider handles online account access and state logins for the nonprofit
Transparent billing and invoicing practices
Their list of reputable references and public customer reviews

If your provider is not living up to your expectations, or not completing the necessary steps to protect your nonprofit from legal noncompliance consequences, it’s your responsibility to change course. Look at what you’ve paid for, check to make sure your states have received the money they’re owed in addition to filings due, and if not, pursue recourse for expected services. If all else fails, jump ship and ask for help from a new provider! (Note: there could be increased fees your first year if you’ve been left with a mess).

Consequences of Solicitation Noncompliance

The consequences of a mismatched partnership can vary just as much as the punishments for noncompliance. State responses to noncompliance range from no action or a minor slap on the wrist, to significant headaches, penalty fees and mountains of paperwork, or even up to critical legal action. The response depends on the state and their level of consequences (State Investigations: What Nonprofits Should Know).

When you come to the conclusion that your nonprofit has no longer satisfied a state’s registration expectations, your first action should be to triage the states with the biggest consequences. The states with the worst fallout and most complex cleanup process often include: CA, FL, MD, OH, PA, SC, TN, and VA.

California, Pennsylvania, and Virginia publish databases of their delinquent nonprofits. Anyone can see these registries: donors, grantmakers, board members, etc. Pennsylvania also, along with South Carolina, has strict fines and fees enforcement if a deadline is missed and penalties assessed. Laws in Florida and Ohio make it possible to categorize willful compliance violations as a felony. Similarly, in Tennessee, they classify willful false filings as a misdemeanor the first time, and a felony the second time; they also, along with Maryland, can levy aggressive fines.

Registration Reinstatement: Back Filings & Late Fees

Penalties tend to be most severe if you’ve previously registered and then miss the renewal deadline, which comes around annually for many states. Getting on a state’s radar and then dropping out of view can be a big red flag. Even if you’ve ceased to solicit while noncompliant, the process to withdraw from a state’s charitable solicitation registration requirements is not a simple break-up: it’s a messy uncoupling.

Missed deadlines, grace periods, and extensions all take time and form-filing expertise, especially when you’re navigating multiple states. Each one can have different expectations and due dates. A critical expectation when navigating noncompliance is understanding the obligation for back filings & gap filings, which not all states have but some states are very particular about.

Even when it comes to delayed initial registrations, while potentially less likely to be caught, once you step into legal compliance you may find yourself with back-filing requirements if the noncompliance became chronic. This, in conjunction with late fees for some initial registration states (CA, DC, IL, MA, NM, OH, PA, and RI), means you may find yourself in a multivariable storm of confusion. If you’re just starting out, here’s a broad suggestion for which states to register with first: CA, NY, FL, IL, PA, MA, WA, NC, and OH.

And if that’s not enough, bear in mind, you might need to quickly stop soliciting in states where a registration was never submitted, or a renewal deadline was missed.

Questions to Ask Before Getting Compliance Help

Friendly reminder, compliance is primarily your (the nonprofit’s) responsibility as the one performing charitable work reliant upon state and donor trust. Check searchable online databases and, because some databases are misleading, reach out to state regulators directly wherein you qualify for registration obligations to confirm if you’re compliant. If your administration bandwidth is limited, your current provider has ghosted you, or this is entirely out of your wheelhouse: ask for help! There are many sources of knowledge in this day and age, to get started first ask yourself the following questions, to start gathering context for whomever you may select to assist you further:

Are you registering in more than 10 states?
Are you registering nationwide or growing state by state?
Are most upcoming registrations initial or renewal?
In which states are you noncompliant, how late are you, and how many years have you missed?
How serious is it? Have you received legal notices?

Affinity is Here to Help

If you choose Affinity to assist you with next steps, we’ll do the legwork of reaching out to state regulators and searching online databases for the most recent status of your organization, and complete a compliance assessment with you. Affinity’s services are backed by reliable tools and compassionate Registration Specialists. Our expert staff has combined decades of experience and established lines of communication within this industry. The cost of going it alone can be steep. Before writing any checks, connect with Affinity and have a conversation all about you, what your nonprofit’s unique needs are, and get a Free Estimate of all possible state fines and service fees.

The world of nonprofit compliance can feel like a disorienting maze… good thing you’re not alone! Let Affinity be your guide.

Disclaimer

The information provided on this page is intended purely for educational purposes and should not be construed as legal advice. Every effort has been made to ensure the accuracy and completeness of the information up until the published date. However, laws related to fundraising registration are subject to change, and variations may occur between states. Furthermore, the interpretation and enforcement of these laws can often be complex, and the specifics of your situation can impact how the law applies.

Affinity Fundraising Registration is not a law firm and, as such, cannot provide legal opinions. For all specific legal questions or concerns, we strongly recommend consulting with a qualified attorney who is experienced in nonprofit law and compliance. Hiring a legal professional ensures that your organization is fully aware of its obligations under the law and can act accordingly to remain compliant.

By using this site, you acknowledge that Affinity Fundraising Registration holds no liability for any consequences, legal or otherwise, resulting from actions taken based on the information provided on this page.