It seems as though it’d be for certain that those running a nonprofit organization would uphold their responsibilities of care, loyalty, and obedience. While this is usually the case, nonprofits and their legitimate charitable causes can fall short in soliciting and accepting donations by incorrectly following the legal requirements and ethical guidelines necessary to ensure compliant and effective fundraising efforts. As such, we have broken down the essential do’s and don’ts of soliciting and accepting donations here in Florida so that you can keep your donors content and your organization in good standing.
The Do’s of Soliciting and Accepting Donations
First, ensure your nonprofit is registered with the Florida Department of Agriculture and Consumer Services (FDACS), and renew this registration annually. Donors are entitled to request registration documents and financial statements. Nonprofits must also file annual returns with the IRS to maintain tax-exempt status, or risk automatic revocation after three consecutive years of non-filing. Compliance with the Florida Solicitation of Contributions Act is crucial to protect donors from fraud and ensure funds are used as promised.
Transparency is key to building trust with donors and maintaining compliance. Nonprofits should clearly disclose their goals, financial plans, and the specific type of nonprofit they are, especially regarding tax deductions. For instance, a 501(c)(3) organization should explicitly inform donors that their contributions are tax-deductible. Additionally, because donation pages can cross state lines, it’s good practice to clarify your organization’s status to ensure compliance with different state laws.
Fundraising events are a great way to raise money and engage the community, but they must adhere to regulations. Maintaining detailed records and ensuring all funds are used as intended will boost your nonprofit’s reputation and allow you to serve your mission effectively.
The Don’ts of Soliciting and Accepting Donations
A nonprofit organization can easily fall short in soliciting and accepting donations. It can be as benign as using a famous restaurant or a widely trademarked logo as part of your fundraising event, which will bring on infringement claims. It can be as deceptive as an organization misleading their donors about their mission, how the funds will be used, overpromising tax deductions, and soliciting without being formally registered. Here’s a quick list providing more insight on guiding nonprofit organizations or those who want to form one what to not do when soliciting and accepting donations:
- Don’t overlook online fundraising regulations.
- Don’t charge for raffle tickets and ensure a minimum donation is suggested.
- Don’t conduct bingo more than twice weekly and prohibit those under 18 years of age from participating.
- Don’t permit real gambling if hosting a casino night and don’t utilize any of these proceeds.
Soliciting and accepting donations as a Florida non-profit corporation requires more than just asking for contributions. It involves adhering to legal requirements, maintaining ethical standards, and ensuring transparency with donors. By following these best practices, your organization can continue to thrive, avoid legal pitfalls, and build lasting relationships with supporters. If you would like to learn more about nonprofit organizations and how to solicit and accept donations, do not hesitate to contact one of our experienced business attorneys at EPGD Business Law, with an office in Miami, FL. Call us at (786) 837-6787 or email us to schedule a consultation.
