It is not enough to become an IRS registered nonprofit in order to raise funds. Most states require registration so you can solicit those funds.
Most states now have laws governing charitable solicitations. These rules are known as "charitable solicitations regulations." These laws usually require registration prior to the solicitation of contributions. You may even have to register to raise funds online.
Additionally, a nonprofit may have to provide the state in which it is incorporated with annual financial reports that are sometimes made available to the public. Although these requirements may seem onerous, they exist to protect the public from fundraising scams and phony charities. Complying is not only legally necessary but it also serves to protect your nonprofit's reputation. If a potential donor calls the state office about your fundraising activities, that office can reassure him that your fundraising is legitimate.
If you fail to register, you can be subject to fines, civil suits or even to having your rights to solicit contributions revoked, so don't delay or neglect this part of your fundraising basics.
Registration requirements and fees vary from state to state. Some states don't require registration if you are raising small amounts, but in others a donate link on your website may trigger the requirements. Some states even require the posting of a bond. Your State Attorney General's office should be able to tell you what you need to do. Check this list of Attorney General offices by state.
You may need to register with your city and county as well, so be sure to check there. If you plan to raise funds in more than one state, you will need to register in those states too.
In an effort to streamline the registration process, the National Association of Attorneys General and the National Association of State Charities Officials jointly developed a standardized registration form called the "Unified Registration Statement," or URS.
Of the states that require charitable solicitation registration, all but four accept the URS in place of their own forms, although even with those, you may need to submit additional information. Alaska, Arizona, Florida, and Utah require you to use their own state forms. The URS can be downloaded at multistatefiling.org. This site also contains valuable up-to-date information about charitable solicitation requirements by state.
Registration to raise funds does not fulfill your annual reporting requirement should your state impose one. Neither is the URS usually accepted for annual reporting.
If you do large, continuous, or complex fundraising activities, you may want to hire a consultant who will take care of your registrations and many other facets of your campaigns. There are companies that specialize in taking care of charitable solicitation registration for nonprofits. One such company is Labyrinth, Inc.
