The end-of-year giving cycle can make or break the revenue projections for nonprofits which rely on donor gifts to support valuable programming and staffing. Given a tumultuous and unpredictable year, which has disrupted office routines and sometimes re-focused efforts to “critical” work, it is even more important that your organization comply with state charitable giving laws as well as craft a compelling message.
Sometimes this level of legal compliance falls through the cracks because an organization is run largely by volunteers. Other times, volunteers expand fundraising efforts without communicating such growth to a skeleton staff or accountant who does the nonprofit books. In any case, fall is the perfect time to check that legal compliance fully supports the organization’s fundraising activities.
At a minimum, be sure the organization has a valid business license(s), has registered to solicit donations, and is mindful of special rules for events like raffles and auctions. Our top list includes:
- Business licenses. Be sure your local and state business licenses are in effect and up-to-date. Especially if your organization took advantage of government extensions to delay the usual spring-time tax filings, look now at whether all business licenses were in fact renewed for 2020. DO you have the requisite authorization to conduct business in each jurisdiction where your nonprofit operates
- Charitable solicitation licenses. Maryland, Virginia and the District of Columbia all require that every charitable organization register with the state prior to soliciting contributions in the state. The type of registration required depends upon the level of charitable contributions received by a charitable organization. There can be limited exceptions for charities which are religious organizations or only solicit from their own members, but these rules vary from jurisdiction to jurisdiction and may need to be affirmatively confirmed by the state before an organization can rely on the exemption.
- Unified Registration Statement. If your organization solicits regionally or nationally, you may be able to take advantage of a multi-state efficiency known as the Unified Registration Statement. Check desired coverage carefully. Maryland and DC participate; Virginia does not.
- Raffles, bingo and other games. Always check the state and local regulations before conducting any type of game, even if it is for charitable purposes. Rules often differentiate between real property and personal property, who can conduct the event, benefit, and whether there is a numerical limit on how many activities can be conducted within a year.