This article was written by Sharon Cody, JD. She is the partnership manager at Harbor Compliance, a leading provider of compliance solutions. Sharon’s passion for educating nonprofits on the value of compliance stems from three decades spent as an attorney, foundation executive, charitable fundraiser and nonprofit board member.
Trust is essential to fundraising success. When raising funds for an important cause, nonprofits reach out to people asking not only for a donation but also for their trust. People are eager to give, especially in times of crisis, but they also want assurance that their donation is going to the right place. No trust, no donation. That’s why fundraising registration laws are crucial—they protect the generous public. Complying with those laws demonstrates your transparency, accountability and respect for your supporters. Messaging compliance, as well as your mission and impact throughout your fundraising, will maintain your donors’ trust and deepen your organization’s relationships with them.
Fundraising Registration Compliance
Putting your fundraising in order means putting your fundraising compliance in order too. This can be challenging. Fundraising isn’t regulated the same way across all 50 states, and each state’s registration process is different. Forty-five states regulate fundraising, and 40 require nonprofits to register before soliciting within their borders. California requires registration within 30 days of receipt of a donation. Half of all states require nonprofits to include fundraising disclosures on donor correspondence, including solicitations. Charitable solicitation registration is just the beginning. Nonprofits must file annual reports with each state where they’re registered.
But where must you register? Understanding how states define solicitation is essential to understanding where fundraising registration is required. Solicitation is defined as asking for funds for charitable purposes, regardless of the solicitation method, and without regard to whether a donation is received in response. Solicitation occurs where the request for a donation is received. In this modern age of online fundraising, solicitation can happen anywhere. If you are not certain where your solicitations are being received, you may need to register nationwide.
Organizing Your Fundraising
Once your compliance is in order, it’s time to move on to organizing the rest of your fundraising. A great way to do this is to go step by step through the donor giving cycle: donor identification, engagement, solicitation, recognition and stewardship. With your development plan and calendar in hand, review your fundraising strategy, your fundraising methods and your fundraising message. This way you can make sure your strategy, methods and message align for each phase of the donor cycle, and your communication and interactions with your donors will be consistent and purposeful.
As you review each step of your donor cycle, be certain that your messaging not only aligns with your strategy but puts your donors at the center of your story. Remember the donors make all you do possible. Don’t forget to incorporate your nonprofit’s commitment to best practices into the messaging. This is a crucial element of your nonprofit’s story and demonstrates your respect for your donors.
Be sure you are messaging consistently across channels and across the donor spectrum. Prospective supporters, lapsed donors, monthly givers, major donors, grant funders and event sponsors all need to hear about your nonprofit’s mission and the impact their gift will make in the community. Audit your website, fundraising materials, even your donation forms to make sure your nonprofit’s message comes through loud and clear across every channel. Train your board members and volunteer solicitors in broadcasting your message. Having a strong, consistent message and informed ambassadors to spread that message is a great way to put your nonprofit on the path to success.
Demonstrating your commitment to compliance should be a cornerstone of your message. It demonstrates your transparency, accountability and good governance. It’s an important best practice, particularly in the eyes of donors. Savvy donors will research your organization before giving. Properly registering can attract their attention, earn their approval and eventually secure their donations. If you want sophisticated donors, proper compliance is a must.
Important steps to engage sophisticated donors:
- Use charitable solicitation disclosures as an opportunity to message your compliance to donors.
- Message compliance at donor engagement events like tours, events and volunteer training.
- Incorporate your commitment to compliance into all solicitations small and large. Message it in donor letters as well as at donor lunches, and include it in materials for capital campaigns, planned giving campaigns and giving days.
- Make compliance part of your donor recognition strategy as well as your donor stewardship. Include compliance messages in thank-you letters, status updates and annual community reports.
Start Building Trust Today
Fundraising is challenging and involves a great deal of hard work. Organizing your fundraising strategy, methods and messaging will make it easier. Don’t forget to put your donors at the center of your story. They are the reason you’re committed to accountability and transparency. Utilizing best practices and fundraising compliance is your way of honoring their support of your shared mission and maintaining a long-lasting relationship built on trust.
Harbor Compliance does not provide tax, financial or legal advice. Use of our services does not create an attorney-client relationship. Harbor Compliance is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency.