This month Funding for Good has been teaching in Small Business Center’s across the region and one hot topic has emerged from our workshops: “To have or not to have a Charitable Solicitation License?”
NC happens to be one of many states that require nonprofit organizations to secure a Charitable Solicitation License in order to fundraise for their cause. If you live outside NC, be sure you check out your state’s requirements, but for all of our local friends, here are the top five things we believe you should know:
1. Who needs it?
According to the Department of the Secretary of State you must have a license if
a) “You are a charity or a sponsor or person that asks the public in North Carolina for contributions or donations to support a charitable purpose or
b) Your charity or sponsor or person takes part in a charitable or sponsor sales promotion. “
2. What is considered fundraising?
According to the state, nearly anything your organization does to generate dollars is considered fundraising. This includes direct mailing, annual fundraisers, requests for support via social media, hiring a fundraising consultant, profits from merchandise sales, sponsorships, corporate requests, capital campaigns, and much more!
3. Are there exemptions?
There are currently thirteen exemptions for nonprofits in NC. For example, if your nonprofit does not raise at least $25,000 per year you might be exempt. Keep in mind that any nonprofit that hires a fundraising consultant must secure a license even if their fundraising falls below that $25,000 threshold. For a complete list of exemptions, click here.
4. How do I apply for a license?
The application process is quite simple and can be accessed on the NC Department of Secretary of State website.
5. Is there a fee for the license?
Yes, there is a fee and it based on your organization’s income from the prior fiscal year. Fees range from $50-$200.
Keep in mind that dollars raised from government grants or received from federally exempt organizations are not considered “contributions” and therefore are not considered when determining what fee your organization will pay.
While many legal processes are intimidating and lengthy, the process for securing a Charitable Solicitation is honestly quite painless. Before you raise a dollar make sure you have your license!
If you have questions related to this topic, please visit the state site where they have lots of great resources. NC Department of the Secretary of State.
Nonprofit Charitable Solicitation License: Who Needs it and Why
Starting a Nonprofit and the Questions to Consider