Recently Clearly Compliant has had a string of clients and potential clients seeking assistance to “de-register” in specific states. It made me think of a saying I heard all too frequently from my Mom, “Sarah, your eyes are bigger than your stomach.” My Mom was an amazing cook who could turn mud into Mississippi Mud Pie, but let’s face it, with six kids to feed, it was never a good thing to see food wasted. I am NOT talking about greed. I AM talking about how easy it is to think we need more than we do! What is the recipe for success in state charity registration?
In my experience nonprofits that skip the assessment phase may end up registering in states where funds are not solicited. “Universal” registration is a term used in the industry and there are organizations that clearly need to register in every state where charity registration is required for fundraising. It sounds good. It sounds easy. However, for many small and medium size nonprofits a best practice is to complete a thorough assessment based on 3 – 5 years history from the donor database, mailing lists, member addresses, grant applications, website, social media, and all other fundraising activity. How much is the organization raising in each state? How many donors? What are the giving trends? Then, complete a cost/benefit analysis for each state that includes a comparison of funds raised to expenses for state registration. For example, if total cost to register in one state is $250 and donations are from two people totaling $50, consider stopping the solicitations. There are always exceptions….an organization may receive $0 from a state but know they will be applying for a grant or there is an opportunity for a future gift and the organization wants to be poised and ready to accept.
Like many great recipes, a charity registration assessment takes work. But thorough prep work may just leave more $$$ in your organization’s pot for mission accomplishment!