By Richard W. Lewis, CPA, CFE, Business Assurance & Advisory Services Partner | Not-for-Profit Team
Successful fundraising is the life blood for most not-for-profit organizations. As a result, development officers and chief fundraisers are constantly challenged with increasing contributions and should explore all possible options in doing so. This includes the traditional fundraising approach of soliciting contributions from historical donors, hosting special events, formalizing a capital campaign, and highlighting the annual fund. However, expansion of donor lists and “asks” beyond local philanthropists, historical donors, and foundations and finding new ways to connect with potential donors in a way that they prefer to communicate has to be utilized. This likely requires the progressive use of digital marketing.
Soliciting contributions through the use of digital marketing has never been easier. From Facebook and Twitter to First Giving and Crowdrise, ways to connect with donors and potential donors across the United States or around the world is always at our fingertips. Development officers and chief fundraisers should, at the least, explore these tools as possible means to expand a non-profit organizations donor list and resulting contributions.
Whatever means is used in fundraising, minimizing reputational risk by maintaining compliance with all federal and state regulations is of the utmost importance in the non-profit industry. This compliance includes knowing and understanding laws on charitable solicitation registrations. Fundraising activities are regulated by state law and many states require non-profit organizations to register with their state before commencing fundraising activities. What constitutes fundraising in a particular state is not always clear, especially with the introduction of technology and online tools.
Fortunately, the National Council of Nonprofits recognized the complexity of these rules and, in conjunction with Harbor Compliance, produced a white paper to help non-profit organizations achieve and maintain compliance with state charitable solicitation rules. The white paper along with other important information on charitable solicitation registrations can be found on their website.
The strongest non-profit organizations will search far and wide for donors that are willing to financially support their cause. Stakeholders of a non-profit organization should expect nothing less, however, remaining aware of and maintaining compliance with the laws that govern fundraising activities are even more important. The requirement to register charitable solicitation forms with each state where a non-profit organization performs fundraising activities should not be a surprise and ensure that non-profits are raising contributions in a legal and ethical manner.
Contact your not-for-profit’s legal advisor if you have any questions or concerns on compliance for your organization.
For more timely not-for-profit accounting, compliance, and governance topics, read our not-for-profit blog.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.