As mentioned in our earlier blog post on State Filing, most states require that you register with the Attorney General for the right to solicit funds within the state, and most states additionally require you to report on your fundraising revenues and expenditures. Fundraising for a non-profit can take many forms, and below we discuss some of the legal issues that come up in the context of non-profit fundraising.
- A possible avenue to secure funds to be available in the future is to get donors to put your non-profit in their will. The donor can use a legal device called a codicil to amend their will to include your non-profit. You can offer to draft the codicil for the interested donor so their only step is to complete the codicil.
- A planned gift is a major contribution that can range in form between a bequest to a trust, and involves financial advisors, tax attorneys and others who assist in the process of putting the planned gift together. The gift can include money, stock, insurance, property or other assets, and can either be paid to the organization at the donor’s death or during their lifetime, depending on how the donor wants to structure the deductions. Setting up a planned giving program is best done under the advice of an attorney.
- Placing a telemarketing call from an automatic dialer to a cell phone is prohibited by the FCC, but calls from political organizations, charities or telephone surveyors that aren’t made to sell goods or services. If you do sell products to raise funds, you may call someone who has made a purchase within the last 18 months, as an “existing business relationship” lasts for 18 months.
Disclosures to Donors
- For 501(c)(3) tax-exempt organizations, contributors who gave a “quid pro quo” donation (received something in return) of more than $75 must receive certain disclosure information, and donors contributing more than $250 must receive additional disclosure information. Further information can be found on the IRS’s web site on Substantiating Charitable Contributions.
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