Nonprofit Fundraising

Nonprofit organizations play an important role in building thriving communities, stimulating economic growth, and strengthening civic engagement. These organizations have been, and continue to be, beneficial to society by ensuring that all voices are heard equally. In order to reach these goals, nonprofits raise funds which can then be redistributed back into the communities they serve. Before engaging in nonprofit fundraising activities, however, there are specific legal responsibilities that must be fulfilled.

A large part of our practice at Copilevitz, Lam & Raney is ensuring that nonprofits are up-to-date on regulatory compliance issues. We work diligently to make certain that these organizations are permitted to raise funds for their respective missions, both in the state of Missouri and nationwide. To learn more about how we can assist your organization, consider contacting our Kansas City office at 816-472-9000 today.

What Is Nonprofit Fundraising?

Broadly, nonprofit fundraising refers to any efforts made by a nonprofit organization to solicit and secure funds for their mission. Fundraising is essential to helping an organization expand in order to meet the needs of their community. Financial contributions can come from a variety of sources, including:

Private/individual donors
Businesses
Foundations
Government grants

Without fundraising efforts, nonprofits would lack the financial support to carry on their projects. Fortunately, fundraising has been made easier with the advent of technology – which gives nonprofit organizations the ability to connect with donors on a nationwide or even global level.

How Do Nonprofits Fundraise?

In the past, fundraising efforts were much more involved, often requiring organizers to reach out to potential donors or hold large scale fundraising events. Now, there are a variety of different options available to nonprofit organizations to solicit donations. Some of the most common avenues that our nonprofit clients use to fundraise include:

Online campaigns: More and more, nonprofit organizations are looking to online campaign efforts to increase their fundraising revenue. Whether it is to advertise an in-person event or to conduct crowdfunding, online campaigns are a valuable tool for nonprofits.
Virtual events: The rise of virtual meeting spaces like Zoom and Facebook Live offer exciting fundraising opportunities. Through these platforms, it is possible to hold virtual events to engage with the community and solicit donations. These virtual events can be casual, such as an online trivia night or as formal as a panel discussion with prominent stakeholders in the community.
Auction fundraising: A classic fundraising activity is the auction, where local businesses donate products or services as a way to solicit donations.
Recurring memberships: The membership model has transformed the way businesses operate, and this can be extended to nonprofit fundraising as well. Perhaps your organization offers exclusive benefits to individuals who choose to become members on a recurring monthly or annual basis. This offers a stable source of revenue for nonprofits.
Merchandise: Some nonprofits generate revenue through the sale of merchandise, which can be sold either via an online marketplace or at your nonprofit’s physical location.
Grants: For new and established organizations alike, grant opportunities are incredibly valuable. Community foundations and private foundations regularly distribute funds to nonprofit organizations in the form of grant donations.

Regardless of how you decide to fundraise for your nonprofit organization, it is essential to keep detailed records of the donations that you receive. This will become important when completing annual reports and fulfilling regulatory compliance requirements. An experienced attorney at Copilevitz, Lam & Raney can help ensure that you are recording all fundraising activities according to the rules and regulations of Missouri law.

Do I Need to Register My Organization Before Fundraising for My Nonprofit?

Most states require charitable organizations and nonprofits to register before soliciting donations. This means that a nonprofit organization must register in each state that they plan to fundraise. Failing to register your organization before fundraising can have serious legal consequences, including fines up to $1,000 and being prohibited from collecting donations in the state. Some organizations are exempt from registering before soliciting donations, including:

501c3, 501c7, and 501c8 tax-exempt organizations.
Religious organizations
Educational institutions
Entities that do not receive funding from the public, but rather solicit donations within their membership basis

If your nonprofit organization does not fall under any of these categories, it is necessary to register through the Attorney General’s Office (Revised Statutes of Missouri § 407.462.1). In addition, all organizations that register to solicit donations are also required to file an annual report within seventy-five days of the closure of their fiscal year. Some nonprofit activities also require additional licenses. For instance, serving alcohol at a fundraising event necessitates obtaining a license from the Department of Public Safety. It is important to adhere to these legal requirements to ensure that your nonprofit may continue serving the community and generating revenue.

How Do I Register My Nonprofit for Fundraising?

To register your nonprofit for fundraising, you must submit the necessary paperwork through the Attorney General’s Office either by mail or online. The application form requires basic information as well as some financial information, including the name of your bank and the means by which you plan to solicit funds.

There is a $15 registration fee, which must be paid at the time of submission. The average processing time for receiving a charitable solicitation license is one week, but this timeframe depends largely on the volume of applications. If your organization employs professional fundraisers or solicitors, they will be required to register as well.