Hi,
Most nonprofits are registered to fundraise in exactly one state – their own – and are quietly out of compliance in dozens of others without knowing it. The rule catches almost everyone off guard: you generally have to register with a state before you ask its residents for money, and roughly 40 states plus DC require it.
The surprise is what counts as “asking.” It is far broader than a gala or a mailer. If you do any of these, you are probably soliciting in states you have never registered in:
- Email or mail a donation appeal to supporters who live out of state
- Run an online or crowdfunding campaign anyone, anywhere, can give to
- Apply for a grant from a foundation based in another state
- Put a “Donate” button on a page residents of every state can reach
Here is how it actually works:
- Roughly 40 states plus DC require charitable registration before you solicit their residents, each with its own form, fee, and deadline
- It is an annual cycle, not a one-time filing – you renew every year, everywhere you are registered
- Your donation platform does not do this for you – Stripe, PayPal, GoFundMe, and Facebook fundraisers register nothing on your behalf
- Around two dozen states also require specific disclosure language on your donation pages and receipts
- Miss it and you are looking at fines, forced back-registration, and a very awkward finding when a funder or a state Attorney General runs due diligence
The reason this can’t wait is that it compounds. Every year you solicit unregistered is another year of exposure stacking up, and it surfaces at the worst possible moment – a big grant application, a merger, an audit – exactly when you need a clean record.
Reply to this email by Friday and we will set up a free 15-minute call with one of our senior nonprofit specialists to map where you are actually soliciting versus where you are registered. Bring a rough list of the states your donors are in, and we will show you the gaps.
Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax