05/28/2026
Does Your 501(c)(3) Need to Register With the State Before Asking for Donations?
Many nonprofit leaders assume that once an organization receives its 501(c)(3) determination letter from the IRS, it is free to immediately start soliciting donations. That assumption is legally dangerous. Federal tax-exempt status and state-level authority to fundraise are two entirely separate legal matters and conflating them can expose an organization to significant penalties, disrupted fundraising campaigns, and the loss of its ability to operate in a given state. Learn more about 501(c)(3) registration.
What Are Charitable Solicitations?
Before examining the registration question, it is essential to understand what the law considers a “solicitation.” The definition is broader than most nonprofit leaders realize. A charitable solicitation is any request for a contribution intended for charitable purposes, regardless of the form it takes. This includes direct mail campaigns, emails, verbal requests, newsletter appeals, social media posts, fundraising events such as auctions or dinners, and text message campaigns.
The most consequential and most frequently overlooked form of solicitation, however, is a nonprofit’s own website. In most states, a publicly accessible website with a “Donate Now” button constitutes a continuous solicitation directed at residents of every state in which the site can be viewed. An organization whose donation page is visible to a California resident is, under most interpretations, soliciting in California, regardless of where the nonprofit is incorporated or where its staff is located. For large organizations fundraising online, this single fact has more compliance implications than any other.
Understanding the full scope of the solicitation definition is the critical first step in determining registration obligations.
