Over the past several weeks, I’ve spoken with several different non-profit creators that were surprised to hear that their organizations would need a charitable solicitation license in connection with their fundraising efforts.
If an organization or individual asks the public for contributions and/or donations to help, aid, or otherwise support a charitable purpose, a charitable solicitation license is needed.
What is considered a “contribution?” A “contribution” means a promise, pledge, grant of any money or property, financial assistance, or any other thing of value in response to a solicitation (including in-kind contributions or goods or services).
Is my organization exempt from this license requirement? North Carolina General Statute 131F-3 provides for a number of statutory exemptions from the license requirement. A careful review of the statute should be conducted to see if your organization would qualify for such. To obtain an exemption, your organization would need to submit a written request with supporting documentation to the North Carolina Secretary of State Charities Division.
My organization isn’t exempt. What do I need to do now? If your organization does not qualify for a statutory exemption, license applications can be completed online using the Charities Division’s online filing portal.
How much is the filing fee? The license application fees are statutorily set under North Carolina General Statute 131F-8. The fees are set based on the contributions received per fiscal year.
What do I need to do every year to keep my license active? The organization will need to file a renewal application every year to keep the license active. The renewal application is due four and a half (4 ½) months after the organization’s year-end, which is the same filing deadline as the IRS Form 990.
What are the potential penalties if I fail to obtain the license? Failure to comply with the charitable solicitation license statutory requirements can result in civil and criminal penalties such as an administrative penalty up to $1,000 per act or omission which constitutes a violation, a civil penalty up to $10,000 per violation, and a criminal charge of a Class 1 misdemeanor.
What if my organization solicits contributions in other states? Many other states have some version of a charitable solicitation license and filing requirements. If your organization is soliciting funds in other states, you should speak with an attorney licensed in that state to determine if it is necessary for your organization to file in that state.