The secret to fundraising success for any organization, especially during uncertain times, is to build and boost donor trust. Savvy donors are looking for ways to give, but they want to be certain that the nonprofits they are giving to are legitimate and that their donations are being put to good use. Nonprofits should make fundraising compliance a priority, not only because it’s the law, but because winning and maintaining donor trust is crucial for the success of any charity.
Demonstrating your commitment to fundraising compliance should be a cornerstone of your message. It demonstrates your transparency, accountability, and good governance. The question then is, how can you demonstrate your commitment to compliance and build trust with your donors? Check out these five ways you can boost donor trust with compliance.
1. Follow Proper Charitable Registration Procedures
Before you can begin to ask for donations, you must ensure that your organization is properly registered wherever you wish to raise funds. It’s important to note, regulation on solicitation doesn’t begin when you receive a donation, it begins when you ask for it, regardless of the method used to solicit donations. Fundraising is not regulated the same way across all 50 states. Currently, 41 states regulate fundraising by requiring registration. Properly registering can attract the attention of donors, earn their approval, and eventually secure their donations. If you want sophisticated donors, proper compliance is a must.
But where must you register? Understanding how states define solicitation is essential to understanding where fundraising registration is required. Solicitation is defined as asking for funds for charitable purposes, regardless of the solicitation method, and without regard to whether a donation is received in response. Solicitation occurs where the request for a donation is received. For example, if your nonprofit is in New York and you’re soliciting a donor in New Mexico, you must comply with the fundraising regulations of both states. In some states, like New Mexico, you will also have to appoint a registered agent. In this modern age of online fundraising, solicitation can happen anywhere. If you are not certain where your solicitations are being received, you may need to register nationwide.
States maintain online databases that with the click of a button permit your donors to see whether your charity is registered and in good standing. Donors are encouraged to check their state’s database before giving. Help prove just how trustworthy your nonprofit is by making sure you are compliant and listed that way on state databases. Your donors are generous people with busy lives, navigating a complicated world. Respect their time. Make their decision to give as easy as you can.
2. Train Your Team to Message Fundraising Compliance
Creating a stronger bond of trust between your organization and your donors requires clear and concise messaging on your fundraising compliance practices. Be sure you are messaging consistently across channels and across the donor spectrum. Prospective donors, lapsed donors, monthly donors, and event sponsors all need to hear about your nonprofit’s mission and the impact their gift will make.
Train your staff, board members, and volunteer solicitors to broadcast your message. Having a strong, consistent message and informed ambassadors to spread that message is a great way to put your nonprofit on the path to success.
3. Message Compliance on Your Website and in Fundraising Materials
In the modern age, your website can be a primary source of information for potential donors and corporate partners. Donors are cautioned to do their due diligence before giving and will be looking for information on your site. Prospective nonprofit supporters are frequently researching before they donate. Potential foundation funders, corporate sponsors, and other community partners are reviewing nonprofit’s compliance as well. In many states, a few clicks will reveal a nonprofit’s compliance status. Help spread the message of your compliance and add your organization’s nonprofit status and fundraising disclosures to your website.
It’s also important that you reference compliance in fundraising materials like planned giving and capital campaign brochures. Be sure to include state-mandated disclosure statements in all solicitations as required. Half of all states require nonprofits to include fundraising disclosures on donor correspondence, including solicitations and donor receipts. Do not forget to add a statement of your compliance at the point of donation. This means including it on your online donation page and your appeal reply cards. Wise nonprofits view compliance as an opportunity, not an obligation.
Do not hide an affirmation that your nonprofit’s financial statements are a matter of public record and that you have met your legal obligations for fundraising. Use disclosures to broadcast your nonprofit’s legitimacy, accountability, and transparency to current and potential supporters. Harness the power of disclosures to gain the trust of prospective supporters, boost their giving, and improve your donor retention rates.
4. Include Fundraising Compliance in Your Grant Applications
Demonstrating fundraising compliance does not just boost trust with donors but with foundation funders. Grant applications are also considered fundraising solicitations in many states. When applying for grant applications or making scholarship requests, it’s important to be able to show that your fundraising registrations and disclosure statements are in order. Include compliance messaging so your nonprofit will stand out amongst others, helping increase your chances of success.
5. Make Compliance Messaging Part of Your Community Reports
Make fundraising compliance part of your donor recognition and donor stewardship practices. Include disclosure statements in donor acknowledgments and compliance messages in capital campaign updates and annual community reports.
Look at including compliance messaging as a chance to show that fundraising compliance isn’t a one and done exercise for your organization. Your commitment to ongoing best practices will prove your commitment to honesty and transparency. This will serve you well in your efforts to grow your relationship with donors who have already given and are inclined to give again. Retaining and developing those donor relationships is key to funding your organization’s mission-driven work.
Boost Donor Trust Today
Don’t wait to start building a strong relationship based on trust with your donors. Embrace fundraising compliance as a badge of honor to strengthen your nonprofit’s credibility and help you distinguish yourself. Utilizing best practices and fundraising compliance is your way of honoring their support of your shared mission and maintaining a long-lasting relationship built on trust.
Harbor Compliance does not provide tax, financial or legal advice. Use of our services does not create an attorney-client relationship. Harbor Compliance is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency.