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Article Archive: Fundraising & Grants

Online Fundraising for Nonprofits

November, 2005
By Jason Hutchins, Tech News Staff Writer

When searching for program information, an individual anticipates finding the information they need from the organization's website. Without meeting this immediate impulse, organizations are correct to expect that they may not benefit from the opportunity. Directing a user to 'call for more information' or 'write us at the address listed above' can easily hamper a motivated individual from following through on an inquiry simply due to a lack of time and/or convenience.

Donate Now->> A solution for the impulse
Providing the ability for site visitors to immediately donate to your organization has never been easier or more cost effective. Several systems require no technical expertise to get up and running other than some basic html editing. The account activation process can be completed online and source code is provided to integrate a button into your site linking to a donation page. Even the most basic service providers now provide event registration, real-time reporting and automated thank you emails.

Determining what you need from such a system would certainly narrow the choices. When choosing an external vendor, its helpful to follow some best practices to ensure your efforts are successful.

  • Can the donation and thank you page be customized to look like your website? A donation page that looks similar to your website and contains your logo provides donors with a sense of continuity.

  • What is the privacy policy for your donor data? Please examine the fine print to ensure your donor data remains confidential.

  • Does the system use encryption? SSL certificate encryption provides visitors with confidence that they are donating safely.

  • Can the donor select a recurring or monthly gift?

  • Will your online fundraising efforts involve an email campaign to drive traffic to your site? If your email campaign covers donors in multiple states, please review solicitation registration requirements.

    Free providers, such as Network For Good and NY Charities, all provide transaction processing with charges of roughly 3% to offset the costs of credit card processing. This creates a low risk proposition for most groups wanting to explore adding the feature. Both services utilize the Guidestar database so chances are they already have your organizational data in their system. Regardless of whether you use a provider like this, it is a good reminder that it is beneficial to maintain your organizational listing with Guidestar.

    In general, online fundraising transaction costs range from 3% to 10%.

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    Legal Grey Area
    Many New York City organizations are already raising funds outside of New York State through traditional solicitations like mailings and should closely review multi-state filing requirements to ensure they are in compliance.

    Guidestar
    The Guidestar database provides information that supports many online fundraising systems.

    NY Charities
    NY Charities serves many local groups and may limit multi-state filing requirements.

    Networkforgood.org
    Networkforgood.org is also powered by Guidestar but is national in nature.

    Paypal
    Despite not marketing for the purpose Paypal now has some customizable features for nonprofits and provides a Donate Now button.

    List of Providers
    A list of online fundraising solutions maintained at idealist.org provides a directory of over three hundred and fifty providers.

    		 
    Making the case to your constituents
    The most important aspect of online fundraising is the marketing effort that accompanies the ability to accept credit card donations. Specific and targeted campaigns prove most successful while providing multiple opportunities to make a compelling case to support your cause throughout the site. Sponsoring a child for camp or underwriting holiday meals at a food bank not only provide a concise seasonal appeal for web visitors but lay the groundwork for detailed donor acknowledgement.

    Best practices for donor follow-up.
  • Provide donors with an immediate confirmation of their online gift through a detailed thank you page.
  • An immediate thank you email should be generated for donors.
  • Mail an acknowledgement of the gift within two business days.
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    Legal aspects to consider
    Organizations should ensure that they are listed correctly in places where prospective donors will search to verify that they are a legitimate cause.

    Standardized registration for nonprofit organizations
    In an era of database driven appeals and regional affiliations, chances are high that an organization, though local in scope, has developed significant out of state donor lists.

    As nonprofit fundraising techniques move to email solicitation, groups should ensure compliance with state specific solicitation rules. Any given state has jurisdiction over any nonprofit which conducts solicitation within its borders ? by any means ? subjecting your organization to its laws and requiring registration.

    Miscellaneous, or infrequent donations from out of state visitors through your website is generally understood to be acceptable. However, even if your organization is located in one physical location, an email campaign made to residents of multiple states is often seen as a trigger for the need to complete the registration process.

    		   "Organizations of any size and any means may find that raising funds from the public -even when conducted modestly from a single location ? will give rise to regulatory obligations to multiple states."
    - Multi-State Filer Project    		  
    Today, 39 states and the District of Columbia have laws regulating fundraising solicitation. The basic requirement is that charitable organizations, often regardless of size, must register with the states' attorney general and report annually if the nonprofit raises funds in the state.

    		 

    MultiStateFiling.org
    Multistatefiling.org provides a unified registration document that is accepted in 35 states and the District of Columbia.

    NASCO
    The National Association of State Charity Officials (NASCO) provides a US state charity offices contact directory which includes links, that with a little navigation, will bring you to specific filing requirements.

    NASCO has also produced an 18 page document detailing recommended guidelines for online charitable solicitations entitled 'The Charleston Principles'.

    Local State Filing Requirements
    New York
    New Jersey
    Connecticut

    Editors' Note: Tech News does not endorse any particular software provider listed in this article.

    		  
    To assist nonprofits in achieving compliance the National Association of State Charities Officials and the National Association of Attorneys General developed a common form called the Unified Registration Statement (URS) that is currently accepted in 34 states and the District of Columbia. In the tri-state area, New York, New Jersey and Connecticut all accept this form despite having different thresholds of activity that trigger a need for filing.

    Through the multi-state filer project, The Unified Registration Statement is available online as a 52 page PDF document that can be completed and printed before filing with each individual state. The document includes detailed filing instructions but applies only to registration and registration renewal. Annual filing requirements must be completed on an individualized state by state basis. An effort is currently underway to standardize annual filing requirements.

  • Currently, the URS is the only means for standardized reporting and it applies only to registration and registration renewal.

  • The URS is updated on an ongoing basis and posted online at http://www.multistatefiling.org/.

    For groups concerned that they are not currently in compliance, it is recommended that you proceed to start the filing process rather than wait until you are noticed.



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