The United States is the most generous country in the world. According to charitable giving statistics, 88% of households give to charity. This generosity, however, has attracted criminals who profit from dishonest fundraising practices. To curb the exploitation of generous citizens, a patchwork of state-by-state fundraising regulations exist to protect consumers and nonprofits from deceptive and unscrupulous fundraising practices.
We routinely advise clients about charitable fundraising compliance. This typically comes in two varieties:
Charitable Solicitation Registration:
To facilitate fundraising regulation, state authorities traditionally require charities soliciting their residents for donations to register with its state charity office. Registration allows the state to monitor who is soliciting in their state, and ensures they can find a responsible party if anyone complains. Nonprofits are under more scrutiny than ever before and must avoid being misleading or engaging in “deceptive practices” while raising money.
Professional Fundraiser Registration:
Professional fundraisers include people who are paid to raise money for a nonprofit organization. This may include: grant writers, door-to-door solicitors, call centers, or fundraising consultants. Many states regulate the activity of paid fundraisers and require them to register with the designated state body. Paid fundraisers are usually called “Professional Fundraisers” or “Professional Solicitors.” Nonprofits must be very cautious when using professionals to raise funds because of the legal and ethical problems around these donations.