I work with a small, new charity that has received several $50 donations (totaling $350) from one resident of another state. The first donation was received in August, 2016 and the most recent was received in January, 2017. Although we did not solicit in that state, we did send a thank you note and tax deduction receipt at the end of 2016, which probably constitutes solicitation. Do you know how much the fine or penalty will be if we register with the other state and report the receipt of these funds?
Accepting an unsolicited contribution does not by itself normally trigger a requirement to register to solicit in the 39 states and the District of Columbia that have charitable solicitation registration statutes, but I will accept your conclusion that your correspondence after the first receipt constituted solicitation. It is very hard to just say thank you without “directly or indirectly” asking for more.
If you want to be on the right side of the law in this other state and you are going to continue to solicit there, you should register promptly. You are not likely to face a significant fine in view of the fact that you are voluntarily registering and the amount involved is so small. You are much more likely to face a significant fine if the state Attorney General finds you and forces you to register. In our work with registrations, we have been much more successful in reducing penalties when the charity voluntarily seeks to clear up the situation than when it acts only in response to a demand from the state.
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