Does a charity need to register to solicit nationwide if it has a “Donate Now” button on its website, since residents of all states might see the fundraising appeal online? Unfortunately, for charities using the Internet to fundraise, there is not a lot of guidance on this question.
The Charleston Principles provide some guidance, but they do not have the effect of law (i.e. they are only guidelines, not state laws or regulations). Also, Colorado and Tennessee have answered this question by specifically addressing this issue in their charitable solicitation acts or state regulations. (See our prior blog post, “Does Our 'Donate Now' Button Require Charitable Registration”), for additional details regarding The Charleston Principles, Colorado and Tennessee.)
We can now add Mississippi to this short list of states that have directly addressed this issue.
Mississippi has adopted portions of The Charleston Principles, which were developed to help nonprofits determine whether they must register to solicit solely because they have a website. Of course, an out-of-state nonprofit that directly solicits Mississippi residents by other means—for example, sending fundraising materials to residents—would have to register on that basis, whether or not it has a website. Every charitable organization which solicits or intends to solicit contributions by any means must file a registration statement with the Mississippi Secretary of State, unless exempt in accordance with the Mississippi Code Regulation of Charitable Solicitations §79-11-505. Also, as of 12/20/2017, per the Mississippi Charities Act Rule 2.08 Determination of Online Solicitation: charitable organizations soliciting via the internet or by email are considered to be soliciting in Mississippi if any of the following apply:
- The charitable organization maintains an account in a financial institution located in Mississippi or a physical address or a mailing address in the state
- The charitable organization targets, by expending funds (by trade or otherwise), Mississippi residents for internet solicitations; or
- The charitable organization solicits donations via the internet or by email, by providing a “Donate Now” button or any other indirect form of solicitation and either:
- Receives/intends to receive, in the charitable organization’s fiscal year, contributions in the amount of at least $25,000 from Mississippi residents; or
- Receives contributions from 25 or more Mississippi residents in the charitable organization’s fiscal year.
Any charitable organization soliciting via the internet or by email which does not meet the criteria provided in Rule 2.08 is not required to file a registration statement with the Secretary of State, unless they are utilizing some other form of fundraising or solicitation in Mississippi.
It is noteworthy that the $25,000 and 25 contributions thresholds are state specific (i.e. from Mississippi donors), rather than from all donors nationwide. In most states, dollar or donor thresholds are usually from all sources nationwide.
What does this mean for charities? If you have a “Donate Now” button on your website, then you need to keep track of both the number and amount of online contributions from Mississippi donors and, if they exceed the above thresholds, then charitable registration in Mississippi is required.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
