State Registration Laws: First Steps

You Can’t Ignore State Charity Registration Laws Any Longer, Part 2

by Tony Martignetti, Esq

In Part I, I covered why it’s important to be in compliance with state charity registration laws, what is a solicitation, and where should your organization be registered. Now I’ll leave you with a plan for proceeding.

Charity begins in the home, so register first in your home state. I trust by now you recognize this is not incorporating in your state. This is also not registering your Charitable Gift Annuity program, if you have one and if your state requires it. Those having been completed, your non-profit must comply with this additional layer of home-state regulation.

Then look at where you send the largest number of solicitations. If your fundraising is mostly from online giving, I’m talking about web based solicitations. Rank the states in descending order of population and start at the top, working through the states where your website is considered a solicitation. California is the most populous state and I described their definition of ‘solicitation’ in Part I. Work down your list from there.

Use a government source for population ranking for greater reliability. I would look to the U.S. Census Bureau.

If your solicitations are not primarily through a website then I presume you’re mostly using email or paper mail. Rather than relying on an outside source, start with your own database. Select those you solicit and query for state of primary residence, getting output ranked in descending order by solicitation frequency. Start your registrations at the top, with the state you send the most solicitations to.

With time devoted to taking on a few new states every month, you’ll get your organization in compliance. Remember, you might enjoy exemption in some places. You should also know that some exemptions have to be applied for.

Whether you adopt my plan or proceed on another, you have to get started. To protect your organization’s good name, your board (remember the principles of fiduciary liability) and your officers, you need to operate on the right side of state charity registration laws. You can’t ignore them any longer.

Tony Martignetti, Esq. has been supporting the fundraising needs of non-profits since 1997.  He is the author of Charity Registration: State-by-State Guidelines for Compliance and Managing Director of Martignetti Planned Giving Advisors, LLC. His two websites are State Charity Registration and Martignetti Planned Giving Advisors.

To contact Tony, email him at tony@mpgadv.com.State