Tips when fundraising in multiple states

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Your nonprofit may be aware of its obligation to register for fundraising purposes in its own state (38 states and the District of Columbia currently have this requirement), but did you know that if your nonprofit is asking for donations from potential donors in other states the nonprofit may be required to register in those other states as well? Here’s why charitable solicitation registration in multiple states may be in your nonprofit’s future, if it’s not already part of your nonprofit’s annual filing routine.

First and foremost, we live in a mobile society. People move.

Example: Someone who is a regular annual donor to your nonprofit may move to one of the states where charitable registration regulations require nonprofits to register with the state prior to engaging in fundraising activities. As soon as your nonprofit decides to send its annual appeal letter to that long-time donor, your nonprofit may need to register in the state where the donor lives.

  • Unfortunately, each state has different laws, so there is no uniform filing process. (We don't recommend using the "Unified Registration Statement" since most state regulators prefer their own state's forms and the URS website is not always up to date.)
  • In some states, registration is required before you can solicit there, while in other states the registration requirement is not triggered until a certain amount of donations are received from residents of that state.
  • Different states require different filing fees and have different exemption rules, too.

Second, our electronic stuff moves with us.

Example: Instead of sending out fundraising appeals via snail-mail, your nonprofit may send out appeals for donations via social media, or an electronic newsletter, or even text-to-give messages. There are multiple mobile apps that facilitate fundraising.

  • As soon as someone sends out a solicitation through a digital appeal, that can trigger an obligation for your nonprofit to register in another state.
  • State laws don't address social media solicitation directly, so your nonprofit will have to decide for itself how active its solicitations are in targeting residents of various states.

Third, multi-state filing will eventually become easier.

  • Several state charity officials have publicly announced their intention to create a "single portal" for online registration in multiple states.

Note: We think the state laws are confusing and plan to work with state associations of nonprofits on policy solutions that will harmonize various state laws as much as possible. Please let us know what barriers/challenges your nonprofit is facing for charitable registration in multiple states.

Federal filing requirements  

ALL charitable nonprofits that are recognized as tax-exempt by the IRS must file an IRS Form 990 annually. Failure to do so on a timely basis can lead to hefty fines and, ultimately, revocation of your nonprofit’s tax-exempt status. The type of Form 990 required (whether the 990-N (“e-Postcard”), the 990-EZ, or the regular 990) depends on the amount of gross receipts; and the filing deadline depends on the end date of the nonprofit’s calendar year. Additionally, nonprofits that received unrelated business income during the filing period must file a special form, the IRS form 990-T. (Read about federal filing requirements.) And of course, if your nonprofit pays wages to employees, or has registered trademarks, related federal filings are required at different time periods. 

In addition, nonprofits have state filing requirements, such as those required to maintain their corporate status in good standing in the state of their incorporation, and to report income paid to employees, or to renew licenses, or for various other activities, including to fundraise from residents of the state, a filing that is known as “charitable solicitation registration.” Various state filing requirements may be annual or semi-annual, or only a one-time filing, depending on the type of activity and filing, and the particular state’s regulations. So you don’t miss important state filing deadlines, we recommend you tap into state-specific resources, such as those available through your state association of nonprofits.

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