Beyond Fundraising Registration: 5 Licensing Areas Many Nonprofits Overlook

A preschool hosts an annual summer carnival for a scholarship fund. A community theater plans a silent auction to support the winter performance season. An animal shelter hosts a carwash at the county park to raise money for pets stranded by a hurricane. An environmental group begins selling handmade items online to support a watershed restoration project.

These are all great strategies for creatively engaging potential donors. But each strategy has the potential to trigger licensing and registration requirements beyond the standard charitable solicitation registration requirements nonprofits must consider before soliciting funds. Because licensing requirements vary widely based on the nature and location of the activities, it’s important to ensure that any fundraising activities you engage in are compliant.

Following are the five most common areas where nonprofits run into licensing issues beyond fundraising registration:

General Business Registrations

Many general business activities such as hiring employees, selling products, or hosting recurring events require licensing at the state and local levels. Some examples include:

• • Secretary of state foreign qualification

• • Department of revenue tax registration for employees

• • Tax exemption for corporate income tax and sales/use tax

• Business licensing at the state, county and local levels

Additional Fundraising Registrations

Certain fundraising activities trigger specific licensing and registration requirements depending on the methods used and locations of the activities. In addition to individual registration within the 41 states that require charitable solicitation registration, some examples include:

• • County, city and township registrations

• • Commercial co-ventures (CCVs) in which nonprofits partner with vendors

• • Use of professional fundraisers

• Charitable gift annuity registrations

Games of Chance

Games of chance are a very popular, time-tested means of raising funds for good causes, but varying state and local laws are triggered whenever a charity uses some type of game to raise funds. Examples include:

• • Raffles and sweepstakes

• • Auctions

• • Bingo games

• Casino nights and other types of gambling

Operating Permits

Local operating licenses, permits, and certifications apply to every location where you do business, have an office, hire employees, or conduct fundraising activities. For example, some localities have zoning laws that require a nonprofit to obtain a certificate of occupancy or a home occupation permit to operate a nonprofit activity from home.

Many activities require industry-specific licenses because of the nature of the work involved. Some examples include:

• • Rescuing animals

• • Serving food

• • Providing medical treatment

• • Construction and contracting

• Legal, accounting and other professional services

Whether you’re new to fundraising or looking to build on an existing donor outreach program, our compliance specialists can ensure that your plans are fully compliant before you invest time and money in a new strategy. Just give us a call at 1-888-995-5895 or contact us.

Want to learn more? Check out our fundraising guide.

Have a question about fundraising compliance? Submit it here – we’re happy to help.