MacElree Harvey Resources - Charitable Solicitations Over the Internet

Business Department

Non-profit organizations must consider specific state registration requirements before soliciting contributions on-line

Non-profit organizations soliciting funds through e-mail and over the Internet face several problems with no easy answers. The primary challenge for organizations is determining which states require charitable solicitation registrations. Unfortunately, there are no clear guidelines in the charitable solicitation laws about this issue – and registration requirements are dependent on the laws of each state – making this a complex legal issue for non-profits to navigate.

In many states, non-profits may not solicit contributions or have contributions solicited on their behalf before submitting and gaining approval of a registration statement for that state.

States often require organizations to register if the non-profits conduct solicitations within the state based on their "physical presence." Some circumstances which determine physical presence include sending direct mail to residents, representatives traveling into the state, or if the non-profit was formed or is headquartered within the state.

Registration Requirements for Internet Solicitations
Registration is most likely required for organizations sending solicitation emails – just as it would be for direct mail or faxes. In Pennsylvania, the definition of solicitation encompasses "any written or otherwise recorded or published request that is mailed, sent, delivered, circulated, distributed, posted in a public place, or advertised or communicated by the press, telegraph, television, or any other media." If an organization has an e-mail list and requests funds directly or indirectly through e-mails, that organization has likely already met the registration requirements and therefore must file a registration with the state.

Several states use broad language in defining charitable solicitations as "solicitation through any medium," or "a request for a contribution by any means." Ohio and New York are examples of such states.

Prevailing opinion is that Internet and e-mail based campaigns would reasonably be interpreted to fall under such broad definitions. Therefore a non-profit soliciting over the Internet would be in violation if it does not register in any state that uses similar language – assuming it also meets the other criteria under each state's specific law.

The Charleston Principles
Recognizing the difficulties with the issue of Internet solicitation, in 2001, the National Association of State Charities Officials (NASCO) adopted suggested guidelines, called the "Charleston Principles." These principles are not law and have not been formally adopted in their entirety by any state.

The Charleston Principles specifically discuss Internet solicitation and limit registrations to entities in a state (physical presence) or ones targeting a state's residents. Also, if an organization receives substantial and frequent contributions from a particular state, whether or not it specifically targets that state, it would need to register there.

Because the Charleston Principles have not been universally adopted and are not binding, they only provide guidance for the future. For now, the burden is on each organization to carefully evaluate its contacts with each individual state, review the exact activities it undertakes on its website and with e-mail, and keep up with each state's thresholds for registration.

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The following article is informational only and not intended as legal advice.
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At a glance
Charitable Solicitations Over the Internet

Rules about registration differ from state to state. In Pennsylvania, an organization must register if it requests a contribution through a written or published request advertised or communicated by press, television or any other media.

In many states, non-profits may not solicit contributions or have contributions solicited on their behalf before submitting and gaining approval of a registration statement for that state.

Recognizing the difficulties with the issue of Internet solicitation, in 2001, the National Association of State Charities Officials (NASCO) adopted suggested guidelines, called the "Charleston Principles."

At present, the Charleston Principles are not law and therefore are not binding. Therefore, the state by state regulations still prevail and organizations continue to bear the burden of sorting out whether or not registration is required.