Charitable Solicitation and Registration, Part II: Online and Multi-State Fundraising — Navigating a Borderless Compliance Landscape

With one viral request for support, a local nonprofit can digitally extend fundraising requests across the country. Donation pages, email campaigns, and social media appeals allow organizations to reach supporters nationwide. While this reach can be powerful, it also raises complex compliance questions.

Understanding how charitable solicitation laws apply to online and multi-state fundraising is increasingly important. An electronic request might "reach" across state lines in such a way that it is subject to that state's rules. Knowing when those rules apply, and how to comply with them, can mean the difference between successful fundraising and a headache brought by the IRS.

Why Online Fundraising Creates Multi-State Exposure

Unlike traditional in-person fundraising, online solicitation does not respect state borders. A single donation page may be accessible to residents of all fifty states. As a result, a nonprofit may inadvertently trigger registration obligations in multiple jurisdictions, even if it has no physical presence outside its home state.

States generally focus on whether an organization is soliciting contributions from their residents, not where the organization is located.

The Charleston Principles (and Their Limits)

In response to the growth of internet fundraising, a group of state regulators developed what are commonly known as the Charleston Principles. These principles attempt to provide -- non-binding -- guidance on when online solicitation should trigger state registration requirements.

At a high level, the Charleston Principles suggest that registration may be required when an organization—

• specifically targets residents of a state through online communications; or

• receives repeated or significant contributions from residents of a state through an interactive website

While helpful as a conceptual framework, the Charleston Principles are not binding law. States vary in how closely they follow them, and some states take a more aggressive approach to online solicitation compliance.

Practical Compliance Challenges

For nonprofits engaged in online or national fundraising, several practical challenges arise:

• Determining what constitutes “targeting” a particular state.

• Assessing whether donation volume or frequency triggers registration.

• Managing registrations, renewals, and reporting across multiple jurisdictions.

• Balancing compliance costs against fundraising strategy.

There is no single bright-line rule that applies in all states, which is why a one-size-fits-all approach rarely works.

Risk-Based Compliance Strategies

Many organizations adopt a risk-based approach to multi-state compliance, which may include:

• Registering in the organization’s home state and states where it actively conducts programs or events.

• Monitoring donor data to identify states with significant or recurring contributions.

• Registering in additional states as fundraising activity grows or becomes more targeted.

• Periodically reviewing online content to assess whether it could be construed as state-specific solicitation.

This approach requires coordination between leadership, development staff, and legal advisors.

Governance and Oversight Considerations

From a governance standpoint, online and multi-state fundraising heightens the importance of oversight. Board directors should understand:

• Where the organization is registered to solicit contributions.

• How compliance is tracked and renewed.

• What triggers expansion into additional states.

Final Takeaways

Online fundraising often creates multi-state compliance obligations—it is imperative to know when an online request transforms into a request requiring compliance with another state's charitable solicitation rules. The Charleston Principles provide guidance, but they are not law, and states vary significantly in how they regulate online solicitation. Proactive, risk-based planning is key to sustainable fundraising.

Nonprofits that address these issues early are better positioned to scale their fundraising efforts without regulatory disruption.

This article is for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. For advice specific to your organization's situation, contact Commonlight Legal LLP.