Is your nonprofit at risk posting that giving campaign on social media?

Nonprofit fundraising campaigns happen on social media year round, but especially from Giving Tuesday through the end of the year. It is smart! It's tapping into arguably one of the most effective channels to raise awareness and encourage giving in a season where people desire to be generous and get giving contributions in before the new year.

So, increasingly seeing these campaigns in my social feeds, it got me curious what sort of legal considerations need to be kept in mind before marketing teams hit publish on their channels. Sat down with Attorney and Senior Tax Associate, Jacob Zerkle , to find out!

Q: So Jake, let's pretend I'm a nonprofit hoping to launch a holiday or giving campaign here before the end of the year. Legally, what do I need to remember?

A: Well, for starters, approximately 41 states require that a charitable organization register if soliciting charitable contributions from residents of the state. Each state’s law is a little different (making compliance a nightmare for nonprofits that solicit in all 50 states), but many states take the position that if you direct your solicitation toward its residents (e.g.,“reach into” a state), then you need to register in that state.

Q: What do you mean by "solicit," and what's the big deal? Why is this necessary?

A: Definitions can vary, but soliciting typically means a request or appeal for anything of value with a representation from a charity that a contribution will be used for a charitable purpose. It's a big deal because in most states, the attorney general is vested with authority over charitable solicitation and charitable assets. So (for example) when a nonprofit asks Illinois residents for donations, this triggers the Illinois AG’s oversight authority.

Q: Got it, ok. So does this apply to social media campaigns?

A: The more obvious types of activity requiring registration include direct mail, phone calls, and likely email addressed to a state’s residents. Social media campaigns can be less clear (keep in mind most of these laws were enacted before the Internet!. . . so it’s not always clear how they apply). As an example, something like “Campaign for Change in Illinois: Give Now!” on Instagram, Facebook, etc., is arguably directed toward Illinois residents and may trigger a registration requirement.

Q: A lot of these social campaigns are driving traffic to a giving pages on websites. What about a “donate now” icon?

A: Most states haven’t explicitly addressed a “donate now” icon on a charity’s website (but a few have!). Believe it or not, this can trigger a registration requirement in some states.

Q: So when scrolling, I see a lot of social campaigns leveraging collaborations for things like, "$1 of every coffee purchase will be donated to XYZ charity." Any fundraising considerations these efforts?

A: Arrangements like this often involve a collaboration between a for-profit company and a charity and typically are designed to boost sales for the company while promoting the charity's cause. An easy win, win. Unfortunately, however, collaborations like this are not as easy as businesses and charities might think (i.e., some statutory, regulatory, and other strings might be attached).

Q: What if organizations pay a third party to fundraise for them?

A: This could trigger a separate, additional registration requirement for a charity (and the third party). An individual or company paid for fundraising services is commonly called a “professional fundraiser,” “fundraising consultant,” or similar designation.

Q: So long story short, you can't "just post it." There are important legal nuances to consider before launching these campaigns, and in most states, charitable organizations need to register. What does charitable registration entail?

Depending on the state, the initial registration generally isn’t too terrible (unless you have to do it in a bunch of states). It typically entails, for example, providing information about an organization’s financials, officers and directors, and anticipated methods of solicitation and attaching a copy of certain of the organization’s governing documents. After the initial registration, you’ll have to file a renewal form each year if continuing to fundraise in the state.

Q: Super helpful, Jake. Thank you! Any final thoughts?

Yea, some of this might sound complicated and potentially stressful, but know that most states have exceptions and exemptions from the registration requirement, as well as safe harbors/minimum thresholds for an organization that solicits below a certain amount. Each state’s law is different, making it important to understand your organization’s solicitation activities and its “risk profile”. Attorneys and state regulators can (and often do) disagree on how to interpret these requirements. These considerations shouldn't stop your organization from leveraging social media for campaigns, but simply want to ensure you are proactively registered correctly when required.

Nonprofit Social Media Managers: Keep up the phenomenal work across your channels. I hope the giving campaigns drive an abundance of donations this month to enable your teams to continue making an impact in 2023.

I highly recommend proactively talking with your leadership and legal team (or Attorneys who specialize in advising charities, foundations, and churches, like Jacob Zerkle !) to understand these considerations before you hit publish.