This chapter of Mastering Foundation Law reviews what foundation managers need to know about state-level regulations of fundraising: why and how states regulate fundraising; the basic requirements for compliance; and practical challenges that impact the day-to-day fundraising operations of charitable organizations, including community foundations. This chapter also highlights the implications of state policy issues that impact fundraising.
This chapter is divided into six different parts:
OVERVIEW OF STATE LAWS
This introduction provides a brief overview of state laws that regulate fundraising and the relevance for foundation managers, their grantees, and community foundations.
STATE GOVERNMENT INTEREST
Part one of this chapter offers a short explanation for why state government has an interest in regulating fundraising, and how state government exercises its rule making and enforcement authority over charitable organizations’ fundraising activities.
Part two is a glossary of terms typically found in state fundraising regulations and explains these terms in plain language (non-legalese).
STATE LAW REGULATIONS
Part three offers an overview of state law regulations that govern charitable solicitation registration, identify challenges and uncertainties that exist, and explain how practices may change in the future as a result of a “single portal”, multi-state registration process. This section also includes a list of resources that may be useful for those seeking more details about charitable solicitation registration compliance obligations and offers suggestions for those seeking an outsourced solution to charitable solicitation registration compliance.
STATE LAW REGULATIONS (cont.)
Part four digs deeper into state law regulations relevant to fundraising, such as laws requiring paid professional fundraising consultants to register with the state, and regulations applicable to certain types of fundraising activities, such as raffles and commercial co-ventures. This section also includes a reminder about the self-dealing rules that restrict foundation managers from using grant dollars to attend grantee fundraising events.
IMPLICATIONS OF POLICY ISSUES
Part five introduces the practical implications of policy issues related to fundraising regulations that foundation managers will want to monitor because of the impact of those policies on their grantees and on a foundations’ own operations.
Part six is a bibliography of sources used for this chapter that may be useful for professional advisors or foundation managers seeking a deeper understanding of the topic of charitable solicitation registration and other state regulations that govern fundraising, the policies behind these regulations as well as some practice pointers on these issues.
We hope this chapter provides readers with a basic understanding of the regulatory environment surrounding fundraising and will be useful to help foundation managers and advisors spot compliance issues for their grantees and their organization’s operations. As such, this chapter is written from the perspective of both the foundation as grantmaker, and as an organization manager. Citations and legal authority can be found in parenthesis and in the footnotes after the cited material.
Accessing this Chapter
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