Take-away: Be sure that you are registered to fundraise before you start!
In the last 24 hours, several folks have approached me who thought they could ask for money in Pennsylvania, but couldn’t. Why? They’re not registered with the PA Bureau of Charitable Organizations. How do I know? Because it’s public. Anyone, including donors and foundations, can look them up.
Go ahead. See if you’re registered. http://www.charities.pa.gov/EntitySearch.aspx
(Note: there’s 1 button to search Charities, another for Solicitors/Fundraising Counsel)
If you’re not registered, you should be, because the consequences can be severe. Counsel can incur steep financial fines. Nonprofits can be fined, publicly listed as violators and even forced to “cease and desist” from fundraising in Pennsylvania. Who are the 700+ violators? Here: http://www.dos.pa.gov/BusinessCharities/Charities/Resources/Pages/Enforcement-and-Disciplinary-Actions.aspx
Some violations occurred as far back as 1996…more than 20 years ago! Once you’re on this list, you’re on it forever. You do not want to be on this list. And it’s not just Pennsylvania. If you’re asking residents in 10 states for gifts, you have to register in all 10 states, if their law requires it.
To add to the fun, PA indicates “purely charitable organizations” and some other categories are exempt, but doesn’t list those categories or explain what the phrase means.
But there is hope. Every year, in June, Giving USA announces the latest fundraising trends, and releases their guide to state registration requirements. Because, of course, the rules are different in every state and they change over time. Last time I checked, Delaware didn’t require registration, but they may now. Also, there are companies that will handle the multiple state registration process for you such as Affinity Fundraising Registration: http://www.fundraisingregistration.com/
Here are the examples I encountered. If any of them sound familiar, check your status:
- A small nonprofit thinks they’re ok because they have a 501 c 3 letter from the IRS (Wrong).
- A big consulting firm thinks it can do business with PA clients without registering (Wrong).
- A development consultant contracted for work without registering it. (Wrong! Not only must both the nonprofit and the consultant be registered annually, each contract must be approved and registered with the state before work commences.)
- Most free-lance grant writers think they don’t have to register at all. Wrong, wrong, wrong!