What you need to know before the holidays to receive donations for your nonprofit

With the holidays and Giving Tuesday swiftly approaching, nonprofits and charities may want to consider preparing for the busiest donation season of the year. Many people are far freer with their giving during the holidays and many businesses are trying to fulfill their yearly charity quotas. But before you get started, there are some preparations that need to be made.

Make sure your nonprofit is fully compliant.

Before you can start collecting funds, you need to make sure your nonprofit is still fully compliant with both state and federal regulations. A nonprofit must periodically renew its licensing and ensure that its other paperwork is up to date or it won't be licensed to collect donations in that area. Because there are both federal regulations and state regulations to follow, national and global organizations may find themselves having to reproduce large volumes of documentation for every state in which they operate. 

The importance of nonprofit compliance.

When nonprofits are found to be noncompliant they are fined based on the severity of the lack of compliance. This can be a significant amount depending on how egregious the issue was, how long it was known, and how many elements were found to be noncomplian. This is in addition to the amount of administrative time that a nonprofit organization will need to spend correcting their issues.

In more serious compliance issues, an investigation may need to be launched that will consume resources for the nonprofit. Extensive noncompliance could potentially be considered fraud, if the organization is aware of issues of noncompliance and continues to operate.

Compliance issues can also cause negative public perception, as it may become known that a charity was noncompliant. Many donors are wary of donating to charities that have less than sterling reputations, as it may indicate that the charity isn't managing its own operations correctly.

Challenges related to charitable compliance.

Not only does compliance change from state to state, but compliance also changes from year to year. Because compliance one year could be different from the prior year, an organization can lose compliance without realizing it.

Are you concerned about the accuracy of your nonprofit organization's compliance? Issues of compliance can be extremely complex. Contacting a professional can help. Connect with Charity Compliance Solutions today for more information.

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