Guest post by James Gilmer, compliance specialist for Harbor Compliance
Just as fundraisers research prospective donors and new sources of funding, experienced donors also seek out worthy causes and charities in their communities. Your donors care about where their money is going, and they do extensive research before making a gift. One clear way to demonstrate your charity’s worth is through fundraising compliance. By staying on the right side of the law, and having the right people on the ground, you may find greater fundraising success!
The first thing to remember is that your donors research your charity and mission as much as you scout them (and their capacity to give). Experienced and first-time donors alike want to know their gifts support the cause you advertise, and make a difference in the community.
In other words, while prospect research is vital, it may not be enough. Your nonprofit has to look its best to prospective donors.
Your success begins with your cause, your people, and your “pitch.” Your fundraising researchers have done their homework, created comprehensive donor profiles, and have many tools at their disposal. At the same time, your frontline fundraisers probably have a packet of materials with your nonprofit’s work in the community, history, and reasons to give. Chances are, these individuals are enthusiastic go-getters with compelling stories (and a heck of a sales pitch). This human element can certainly win donations and recurring gifts from engaged individuals, yet you could find yourself losing donations and not even know it.
Charitable solicitation compliance is the backbone of your fundraising efforts. Many fundraisers and nonprofit executives believe that being 501(c)(3) tax exempt is enough to fundraise limitlessly. This misconception can lead you to lose out on grant funding, corporate donations, and your credibility. Forty-one states require your charity to file an additional registration before you solicit donations. Without registering, you could find your charity in violation of state and IRS law, but also in hot water with your donors.
Most states have an online database of charities, where anyone can research registered charities before they give. Experienced donors will do their research, as will corporations making their planned annual gift. If they see your charity is not registered or is delinquent, your chances of earning their donation and trust are lowered. When you apply for foundation or government grants, you’ll have to submit proof of registration along with your grant application. Without it, you may find your grant application held up or denied.
Charitable solicitation compliance may not be sexy, but it will help your nonprofit look its best to potential donors. Compliance affects everyone in an organization, so if this topic is new, be sure to review this Fundraising Compliance Guide. Your state has unique requirements in place to protect its citizens from unregulated charities. By staying on the right side of the law, you make your donors research, and their decision to give, that much easier.
James Gilmer is a compliance specialist for Harbor Compliance, which establishes 501(c) nonprofits and helps them stay compliant. Harbor Compliance assists charities in every state and several countries abroad. James serves on the Board for two nonprofits in Lancaster, Pennsylvania.
Connect with us: @HarborComply