We are a 501(c)(3) charity that is nationally registered with the Internal Revenue Service, but we're having trouble getting through all the individual state fundraising registrations. We thought that selling event tickets or products were exempt but now we're not sure. What do we have to do?
Thirty-nine states and the District of Columbia have charitable solicitation registration laws that require charities and others soliciting for charitable purposes to pre-register with the state prior to soliciting contributions from potential donors within the state, unless the organization is exempt or excluded from the requirement. While the laws are generally similar, they are certainly not identical, and if you want to be sure you are in compliance, you will need to review each of them to see whether you might be exempt or excluded and to see whether your specific solicitation activity is considered a charitable solicitation for which registration is required.
The laws generally cover solicitation to sell goods or tickets where part of the proceeds will be used for charitable purposes. The Pennsylvania Solicitation of Funds for Charitable Purposes Act, for example, defines solicitation as: “Any direct or indirect request for a contribution on the representation that such contribution will be used in whole or in part for a charitable purpose, including, but not limited to, … any sale of, offer or attempt to sell any … merchandise … or other service or tangible good, thing or item of value [and] … requesting the public to attend … [a] performance or event of any kind.”
These rules are intended to cover an offer to sell light bulbs that never wear out when the proceeds provide funds for a charity or the sale of circus tickets to provide events for disadvantaged kids or pensions for first responders. If whatever you are selling will generate funds for a charitable purpose, you are likely to have to register if you want to be in compliance with the laws.
For the complete story on charitable solicitation registration and the most recent updates and changes in the laws, listen to our webinar “Charitable Solicitation Registration Statutes: Everything You Wanted to Know But Were Afraid to Ask” This program was recorded on October 20, 2021.