What it is
Fundraising compliance for nonprofits means following the rules that govern how an organization asks for, receives, records and reports donations. Those rules can come from federal agencies, state offices and local governments.
Common areas include charitable solicitation registration, rules for raffles and other games of chance, handling of donor receipts, and annual filings. Which of these apply depends on the organization's structure, where it operates and where it asks for gifts.
Compliance is not one checklist. A bake sale, an online campaign, a gala with a raffle and a direct-mail appeal can each raise different questions, so many organizations review their fundraising ideas one activity at a time.
How it’s traditionally been approached
Traditionally, small nonprofits have handled compliance through a board member, treasurer or executive director who tracks deadlines and reads guidance from state and local offices. Larger organizations may have dedicated staff.
Many groups also lean on outside professionals, such as attorneys, accountants or tax professionals, for questions about registration, tax-exempt status and reporting. Those professionals give advice specific to the organization, which a general educational page cannot.
Another common habit is keeping written records: board approvals, event permits, receipts and registration confirmations. Organized records can make it easier to answer questions from regulators, auditors or donors later.
How the right fundraising consultant may help
The right fundraising consultant may help you map out your planned fundraising ideas and spot where rules could come into play, such as raffles, online giving, events or out-of-state appeals. They may also help you build a calendar of things to confirm and a system for keeping records.
A first conversation is generally a chance to describe your organization, your plans and where your supporters live. A consultant may ask about your tax-exempt status, your current registrations and how you collect and acknowledge gifts. They are typically not a substitute for a licensed attorney or tax professional.
Good questions to ask include: What experience do you have with organizations like ours? How do you stay current on state and local rules? When would you suggest we involve an attorney or accountant? How do you document your work so our board can follow it?
The bigger picture
Worrying about whether you are doing everything correctly can weigh on board members, staff and volunteers. Clear processes and a shared understanding of who is responsible for what may bring some peace of mind and let people focus on the mission.
Compliance also protects the trust that donors place in you, and the financial health of the organization. Taking it one step at a time, and asking for qualified help when something is unclear, is a reasonable and healthy approach.
Keep in mind
- Raffle, gaming and charitable-gambling laws vary by state and often by city or county, so check current state and local rules and any required permit before planning one.
- Charitable solicitation registration requirements vary by state, and may apply when you ask for gifts from residents of other states.
- Whether a donation is tax-deductible depends on the recipient's tax-exempt status and current IRS rules, so confirm with a tax professional.
- This page is educational only and is not legal, tax or financial advice. Fundraiser.biz is an independent directory, and a consultant cannot guarantee results.
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Frequently asked questions
What is fundraising compliance for nonprofits?
Fundraising compliance for nonprofits is following the laws and reporting rules that apply to how an organization solicits, accepts and records donations. It can include state registration, event and raffle permits, donor acknowledgments and annual filings. The specifics depend on your location and activities.
Do nonprofits have to register to fundraise in every state?
Requirements vary by state, so there is no single answer. Some states ask organizations to register before soliciting residents, and others have exemptions or different thresholds. Check with the relevant state offices or a qualified attorney about your situation.
Do I need a permit to run a raffle for my nonprofit?
It depends on your state and often your city or county. Raffle and gaming laws differ widely and change over time, so check current state and local rules and any required permit before planning one.
Are donations to my fundraiser tax-deductible?
Deductibility depends on the recipient's tax-exempt status and on current IRS rules. This page cannot say whether a gift to your specific fundraiser is or isn't deductible, so confirm with a tax professional.
Can a fundraising consultant handle my compliance?
A fundraising consultant may help you organize your fundraising ideas, flag areas to review and keep good records. They generally do not replace an attorney or tax professional for legal or tax questions, so ask what they do and when they would bring in others.
What records should a nonprofit keep for fundraising?
Many nonprofits keep donor receipts, event approvals, permits, registration confirmations and board minutes related to fundraising. Exact retention needs vary, so ask your accountant or attorney what applies to your organization.
Educational resource. Fundraiser.biz shares general information and connects people with independent fundraising consultants. It is not professional advice. Talk with a qualified professional about your own situation.