#RVABizLaw Tip of the Day: Donations to 501(c)(3) from Donors Outside of VA
We are a local 501(c)(3) charity and would like to put a place for donations on our website. Can we receive donations from donors outside of Virginia?
Yes, but…. many nonprofits have configured their websites so that they can collect online contributions and some have been wildly successful in obtaining contributions from other states and even other countries. The primary question is whether you have to register to solicit charitable funds in each of the states that has a charitable solicitation registration law. Most states, including Virginia, require registration before you solicit unless your organization is excluded or exempted under the particular state law.
The National Association of State Charities Officials has released its set of Charleston Principles that basically provides that you don’t have to register in other states if you have a “passive” website that merely allows a donor to find you and send a contribution over your site. But if you have an “active” site you will probably have to register. It will be considered an “active” site if you have an interactive site and specifically target people in a particular state or receive contributions on a repeated, ongoing basis from another state. If so, it is probably prudent to go ahead and register in the other state. As a practical matter, once you receive a donation from an out of state donor, you will undoubtedly thank the donor, and ask for more support in the future. As soon as you ask for more, you are soliciting in the other state and will clearly trigger the registration requirement.
Some states reportedly are starting to take a position that asking for gifts on a website constitutes a charitable solicitation in their state even without active solicitation or targeting, so a Virginia nonprofit should carefully track its fundraising efforts and monitor compliance with applicable state charitable solicitation laws.
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