Voice from the Field: When Fundraising Crosses State Lines

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The National Council of Nonprofits receives comments submitted on our website about many topics, including charitable solicitation registration. The author of the following blog, a founder and executive director of a small nonprofit (budget size under $1 million), describes the challenges she faces trying to comply with charitable solicitation registration requirements in 43 states. Our website resources explain that registration is triggered by solicitation activity in a state – but as you can see from the comments below, uncertainty abounds about when and where a nonprofit must register - which, in turn, compounds the filing fees and extensive time needed to figure out how to comply with multiple states’ very different laws. We think the experience she describes is representative of many other charitable nonprofits, so we asked her to submit a blog post to share with our readers.

“As founder, president, and chief fundraiser/report creator, I have spent the last two days searching out the information from all 50 states, and the District of Columbia [about charitable solicitation registration]. Our organization, because of size and commitment to "going green," does most of its business by email.  We have a website and are just now assuming a presence on social media. My 501(c)(3), all-volunteer public charity would literally have to double its budget in order to comply with charitable solicitation laws that require registration. The alternative is to cease doing business, and thus cause devastation to families and people with disabilities who rely on our services.

Here are my further thoughts on this:

I think a one stop "portal" would be very beneficial to everyone, as it would certainly minimize gathering information for multiple filings and associated expenses.  Having said that, I sincerely hope that laws will be written (at the federal and state levels) with great care to insure that the small charities who practice ethical due diligence NOT BE PENALIZED of PRICED OUT OF EXISTENCE if they receive donations from individuals or grants from corporations or foundations that have an address outside of the state in which the nonprofit operates. 

Recognizing the need to stop fraudulent "charities" in their tracks, I believe that in-state registry of all charities is important and that EVERYONE planning to donate should be able to view listings regardless of where they live.

I don't think that all charities "do business" in other states by virtue of social media or that a presence on social media should require registration outside the nonprofit’s home state.

I agree that if a nonprofit wants to host a fundraiser in a state, that the nonprofit should have to register with that state.

The charitable solicitation language, as it currently appears, seems to require that almost every charity would become a national rather than local or regional charity. Since churches are exempt from registration for fundraising purposes, why shouldn't all-volunteer service organizations [that are recognized as tax-exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(vi)] also be exempt? 

Our mission is to provide a place in perpetuity where people with disabilities can be successful, equal, and capable, growing to their maximum life's potential through interaction with horses in a positive environment.
We accomplish our mission by providing recreational, educational, and sport programming, including vocational/pre-vocational opportunities, to at--risk youth and persons with disabilities. Individuals are accepted without regard to race, religion, ethnicity, or socioeconomic background. Our funding comes from individuals, corporations, and foundations.

Since that mission requires horses, land, and actual people, we are not likely to work in more than a 100 square mile geographic area. However, we have had people in need choose to come from approximately 150 miles away to participate in our programs. The current laws could be construed to mean I must register our nonprofit in a neighboring state just because those who come from far away to voluntarily participate in our programs, may also choose to make a donation.

Thank you for taking the time to read and consider my email.  My charity has a Guidestar Platinum Seal and a GreatNonProfits 2016 Top Rated Seal, both of which I am extremely proud. 

Sanna Roling, President
Dream Catcher Stables, Inc. – Therapeutic Horsemanship, Texas

The National Council of Nonprofits welcomes your comments and/or suggestions. Send us an email.

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