Industry experts, regulators working to streamline licensing for fundraisers nationwide

• DOI: http://doi.org/10.1002/nba.30388
• Published date: 01 December 2017
• Date: 01 December 2017

DECEMBER 2017

5

NONPROFIT BUSINESS ADVISOR

© 2017 Wiley Periodicals, Inc., A Wiley Company • All rights reserved

DOI: 10.1002/nba

Fundraising

Industry experts, regulators working to streamline

licensing for fundraisers nationwide

As nonprots across the country gear up to start

the new year, most have the sometimes daunting

task of renewing their certications and licenses that

allow them to legally fundraise in the 39 states that

require such paperwork. With every state having its

own requirements, for ms and deadlines, it can be

a challenge—especially for charities that fundraise

nationwide. And it can be expensive as well, with

licensing fees and expenses for professional services

that can reach into the thousands.

Fortunately, federal and state regulators under-

stand how inefcient this patchwork system is, and

are working to develop what’s dubbed the Single

Portal Initiative—an advanced digital platform that

allows nonprots to enter their information into

one database that then aids them in ling for every

state in which they need to obtain licensure. This

system, formally known as the Multistate Registra-

tion and Filing Portal, has been in development for

a couple years now, and holds promise for reducing

the paperwork required of nonprot and professional

fundraisers—and the associated expenses in terms of

time and money.

The details of the SPI are explained on the project’s

website as follows:http://ASmallChange.net.

“The portal will maximize efciency, data trans-

parency, and infor mation sharing by enabling

compliance with registration requirements for all par-

ticipating states without duplication of data entry. It

will make the collected data available to the public in a

searchable and interactive for mat. Academics, policy

makers and the public will be able to conduct their

own inquiries or download data in machine-readable

format. Multistate registrants will realize reduced

administrative costs and inefciencies in complying

with 39 states’ different registration requirements,

allowing more resources to be devoted to charitable

mission. Single state lers will avoid the inconvenience

and uncertainty of paper lings. Registration service

providers will be able to electronically transmit data

for multiple clients. State ling fees will be collected

and disbursed to states through the Single Portal.”

According to Jennifer Chandler, vice president of

the National Council of Nonprots and a member

of the SPI’s advisory committee, the project has faced

many hurdles, especially in terms of developing a

homogenized set of data requirements that will work

for all states.Nonprot Business Advisor

“Each state asks for different data, and many ask

for it in different ways,” she told Nonprot Business

Advisor. As an example, she said, between the 39

states and Washington, D.C., that require fundrais-

ing licensing, there are seven different ways that

nonprots are asked to simply ll out their names.

Other inconsistencies abound: States vary on date of

initial ling, date of renewal, whether fees are charged

for each renewal and when, the amount of fees and,

most pertinently, what constitutes “fundraising” in

the eyes of state law. On that last point, the SPI will

offer no panacea, Chandler said.

“Even if we streamline everything else, nonprots

will still have to determine on their own whether their

activities require licenses state by state,” she said.

As such, many nonprots and professional fund-

raising rms might still hire professional consultants

to do the analysis and le through the SPI. But the

time it takes to le should be streamlined substan-

tially, Chandler said.

“Currently, it costs anywhere from $7,000 to

$12,000 to le for all states,” Chandler said. “This

should streamline that quite a bit.”

For state and federal regulators, there are other

benets to the SPI. Namely, it will help with investiga-

tions into fraudulent charities, Chandler said.

“States will have a lot of data that enables their

attorneys general to do multistate investigations,”

she explained. “All of the data will be in one place,

making it easier to discover bad actors.”

Per the SPI website, the system will enable regula-

tors to combine Form 990 data with state registration

data. And advanced analytics will enable regulators

to better understand charitable resources and solici-

tations, and better focus law enforcement and fraud

prevention resources.

Nonprots and regulators will have to wait awhile

(See LICENSING on page 8)