40 states and the District of Columbia require 501(c)(3) organizations to register with with the appropriate state division overseeing charities before soliciting donations from the public. Often this is a division of the Attorney General’s office or the Secretary of State.

Who Must Register?

Generally, any nonprofit conducting a charitable solicitation within the borders of a state, by any means, is subject to that state’s law and is therefore required to register (and must do so before soliciting).

Typically, states exercise regulatory authority over nonprofits based on one of two premises: the nonprofit is physically “present” in the state or the nonprofit raises funds in the state.  In either case, a state may require the nonprofit to “register” by providing identifying information about the nonprofit and its operations. Organizations may find that raising funds from the public will give rise to regulatory obligations in multiple states.

Noncompliance Penalties

Penalties for noncompliance are severe and expensive.  States are cracking down on unregistered charities.

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