A common question we get asked about fundraising compliance is “What’s the risk to my nonprofit for not registering for charitable solicitations properly?”
The truth is, there are multiple risks and the penalties can vary by state. Let’s take a look at the most common issues.
Penalties and Risks for Failing to Register for Charitable Solicitations
- Damage to your reputation. States take these laws seriously and non-compliant nonprofits have been featured in major media outlets, destroying their public image, which is not easily fixed.
- Fines in the thousands of dollars plus attorney’s fees and related costs. Most fines range from $1,000 to $10,000, however, in Maryland you can be fined up to $5,000 per violation.
- Revocation of the right to solicit funds in the state where the violation occurred.
- Public listing in a database of non-compliant organizations, considered to be in violation, fraudulent or deliquent.
- Felony charges related to fraud. Both Ohio and Florida have language in their state laws that assign felony charges for failure to comply with fundraising registration.
- Loss of staff productivity and morale in responding to enforcement proceedings and financial audits.
In 41 U.S. states, charitable solicitation registration is required by law.
If your nonprofit is located in any of the states listed below, then you need to be registered for charitable solicitations in that state.
Mandatory Registration States
Alabama | Missouri Nevada |
You need to take charitable solicitation registration seriously.
Not only is it the law, but it directly impacts the financial health of your nonprofit and your ability to execute on your mission. If you’re serious about running a successful nonprofit, then it’s a no brainer.
Your best plan is to understand what’s required of your organization, create a fundraising compliance plan and sleep well at night knowing you’re not in jeopardy and can focus on raising the funds you need.
