Starting a charitable organization is a great way to give back and make a difference in your community. Thanks to the internet, it’s easier than ever to scale your impact—to bring your mission beyond your local neighborhood, city, or state, and reach supporters wherever they live.
Before you start contacting individuals online, however, you will need to consider where your organization is registered. In most jurisdictions, 501(c)(3) nonprofit entities are required to register within the state prior to soliciting charitable contributions from state residents.
A solicitation is any form of communication asking for donations. This includes letters as well as digital media such as email campaigns, text messages, social media posts, and so forth.
In any case, if the organization is appealing for money online, there’s a good chance it’s technically a multistate operation. That means the nonprofit may need to file paperwork in every state that requires registration. Otherwise, the organization and its founders could face regulatory penalties and even criminal charges.
Unfortunately, registration can be costly and time-consuming. The fees to register a nonprofit vary from state to state, and range from $10 to several hundreds of dollars. A 501(c)(3) organization may also be subject to substantial IRS fees.
As of this writing, no uniform and comprehensive multistate registration solution exists. The National Association of State Charity Officials has launched a preliminary multistate filing portal at statecharityregistration.org—but at this time, the application only allows for registration in Connecticut and Georgia.
If you need to register your organization in multiple states, or if you’re unsure about your registration requirements, talk to your trusted legal advisor. An experienced nonprofit attorney can work with you to develop cost-effective strategies for registering and growing your nonprofit online.
ABOUT ROBERT J. KRESSLEIN
rkresslein@offitkurman.com | 240.772.5113
Robert J. Kresslein focuses his practice on commercial real estate lending, business planning, and commercial real estate transactions. Mr. Kresslein is the former President of the Maryland Bar Foundation, and Trustee of Sheppard & Pratt Health Systems, Inc. He also was the former Chair of Offit Kurman’s Banking and Finance Practice. Mr. Kresslein currently serves as Treasurer of the Maryland Democratic Party.
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