Should a Dormant Nonprofit Organization Deactivate the “Donate” Button on its Website?

For an inactive nonprofit organization that is not engaged in any formal activities or fundraising efforts, there is no reason to have a functioning “Donate” or “Donate Here” button on its website as it only creates risk (albeit not significant risk) and potential problems (i.e., what would the organization do, for example, if it received an unexpected online donation of $1,000?) There are currently a small handful of states among the 39 states and the District of Columbia with charitable solicitation registration statutes that do not expressly follow the old “Charleston Principles” and do not give nonprofits pass on complying with the state registration requirements even if they are not actively soliciting donations within their state. This minority view is that organizations need to register simply because the “Donate” button is accessible by residents of their state. While the risk of state penalizing a nonprofit in such a scenario is probably not significant, the safest approach clearly is to remove the “Donate” button until such time as the organization decides to resurrect its regular activities and fundraising efforts.

As an alternative strategy, an organization could post a “Sign Up for Our Newsletter” box on its website to collect contact info supplied by visitors to the website who might be future donors. Have other questions? Perkins Law offers a special annual service package for Virginia nonprofit organizations.

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