I have organized fundraising events for a charity for 17 years. Until recently we identified and included a $500 donation in the event price, and I cut a check to the charity for the total amount of the donations. The charity then acknowledged the donations individually as tax-deductible donations. Recently the organization has asked the donors to pay us for our part of the event price and send a separate check to the charity for the donation, but they are finding that it is difficult to get all their donations without long delays or many reminders. Is it legal for me to include the donation in the event price and then cut one large donation check to the organization itemizing all the donors’ names so that they can record it properly?
Yes. But you probably need to register as a professional solicitor and file copies of your contract if you are soliciting donors in any of the 39 states and the District of Columbia that have charitable solicitation registration laws. (You may already be required to register as a professional fundraising counsel because you plan and manage the events.) Different states have different requirements for solicitors, but they normally cover those who are retained for financial or other consideration to solicit contributions for a charitable organization. (Churches and similar religious organizations are usually excluded from the definition of a “charitable organization,” but solicitor registration is usually required even to solicit for charitable organizations that are exempt from the registration requirement.) The registration requirements are not insurmountable, but they are significant. They may well be worthwhile if the charity is losing a lot of revenue by separating the event price from the donation. (See Ready Reference Page: “Compliance Assessments Protect Charities.”)