Nonprofit boards increasingly oversee organizations that fundraise across multiple states, whether through online campaigns, direct mail, events, or corporate partnerships. With that reach comes a corresponding increase in multi-state compliance risk, particularly around charitable solicitation registrations and annual filings.
Understanding this risk—and how it should be governed—is an important part of a board’s fiduciary responsibility.
Multi-State Compliance Is a Governance Issue, Not Just an Administrative One
Charitable solicitation compliance is often treated as a back-office task. In reality, it touches several areas that boards are responsible for overseeing, including legal compliance, reputational risk, and stewardship of donor trust.
Failure to comply with state charitable registration requirements can result in penalties, loss of fundraising privileges, public enforcement actions, and negative attention that extends beyond a single jurisdiction. For boards, the question is not whether staff or advisors are handling filings, but whether appropriate systems and oversight are in place.
Why Multi-State Risk Is Easy to Underestimate
Multi-state compliance risk tends to grow gradually and quietly. Organizations may expand fundraising efforts over time without fully reassessing where registration obligations apply. Online fundraising, donor-advised funds, peer-to-peer campaigns, and national sponsorships can all trigger additional state requirements, sometimes without clear internal visibility.
Boards should be aware that compliance obligations are not static. States differ in renewal cycles, documentation requirements, and enforcement approaches. As an organization’s footprint changes, so does its exposure.
What Boards Should Be Asking
Boards do not need to manage filings directly, but they should be asking informed questions to ensure risk is being addressed appropriately. Examples include:
- In which states does the organization currently have charitable solicitation registration obligations?
- How are registration deadlines tracked and monitored across jurisdictions?
- Who is responsible for ensuring filings are accurate and submitted on time?
- How are changes in fundraising activity or organizational structure evaluated for compliance impact?
- How are state inquiries, notices, or follow-up requests handled?
Boards that want additional clarity on their organization’s multi-state compliance obligations may benefit from an external review. We regularly speak with nonprofit leadership and board members to help assess registration scope, timelines, and risk exposure.
These questions help shift compliance from an assumed task to a governed process.
Risk Is Not Only About Missing Deadlines
While late or missed filings are a common concern, boards should recognize that compliance risk also includes incomplete disclosures, outdated information, inconsistent filings across states, and failure to respond appropriately to regulators.
Inconsistent compliance practices can signal broader control weaknesses. From a governance perspective, accuracy, consistency, and documentation matter as much as timeliness.
Oversight Without Micromanagement
Effective board oversight does not mean inserting the board into operational details. Instead, it means ensuring that management has the right expertise, processes, and external support where appropriate.
Many organizations choose to centralize charitable registration management or engage specialized providers to reduce fragmentation and reliance on institutional memory. Boards should understand whether compliance is being handled in a structured, repeatable way rather than as a series of annual tasks.
Aligning Compliance With the Organization’s Risk Profile
Not all nonprofits face the same level of multi-state compliance risk. Factors such as fundraising scale, geographic reach, donor mix, and public visibility all influence exposure. Boards should expect management to align compliance resources with the organization’s actual risk profile, revisiting that assessment as the organization evolves.
A periodic review of multi-state compliance obligations can help boards confirm that existing approaches remain appropriate.
Conclusion
For nonprofit boards, multi-state compliance risk should be viewed through the same lens as other governance responsibilities: identifying risk, ensuring accountability, and confirming that appropriate controls are in place.
By asking the right questions and understanding how charitable registration obligations intersect with fundraising strategy, boards can support both compliance and the organization’s ability to fundraise confidently across state lines.
— Governance Support —
We work with nonprofit organizations to manage multi-state charitable solicitation registrations and related compliance requirements. We are happy to speak with board members, general counsel, or compliance teams about governance considerations and annual filing responsibilities.