We are considering whether our charity should raise funds with an internet auction or through text messaging. Do you see any registration problems?
There are a lot of unanswered questions about who has to register (and where) in connection with this kind of fundraising effort. Obviously the charity has to register in its home state (if not excluded or exempted by its statute), and, under the Charleston Principles of the National Association of State Charity Officials (NASCO), in any state in which it is seeking to drive traffic to a website or otherwise soliciting. If the gifts are actually made to a separate charity for re-distribution to the requesting charity (as is often the case with text messaging), the intermediate charity must also be registered in those states.
More interesting and less resolved issues arise with the intermediaries who may be hosting the process and/or advising the charity on the best ways to utilize the program. Are they fundraising counsel who must register as such because they are advising or managing aspects of a fundraising campaign?
The state regulators have not given any guidance on how to deal with these situations and do not appear to have made an aggressive effort to regulate the intermediaries.