What are the Charleston Principles?

Understanding the Charleston Principles for Charitable Solicitation Registration

The Charleston Principles, established in 2001 by the National Association of State Charity Officials (NASCO), aim to clarify when charitable organizations engaging in online fundraising must register in states where they solicit donations. Here's what you need to know:

• Purpose: These principles were designed to provide a uniform guideline for state officials and charities regarding Internet-based fundraising activities, addressing the complexities introduced by the digital age.

• Key Criteria for Registration:

  • Specific Targeting: A charity must register if it specifically targets residents of a state for solicitation. This includes any explicit or implicit reference to soliciting contributions from that state or sending messages to individuals known to reside there.

  • Ongoing or Substantial Contributions: Registration is also required if a charity receives contributions from a state on a repeated and ongoing basis or if the contributions are substantial, indicating a regular or significant interaction with residents of that state.

• Interpretation of "Substantial" or "Ongoing": The principles do not define these terms explicitly, leaving it to each state to interpret. However, the general consensus leans towards contributions that are not rare, isolated, or insubstantial within the charity's fiscal year.

• Implications for Charities:

  • Registration Requirements: Charities must consider these principles when deciding where to register, especially if they use passive solicitation methods like a "donate now" button on their website.

  • Compliance: Compliance with these principles can prevent legal issues, ensuring that charities can continue their operations without the risk of fines or legal action for non-compliance.

• Challenges and Considerations:

  • State Variations: Not all states have adopted these principles into law, leading to a patchwork of compliance requirements across the U.S.

  • Prosecutorial Discretion: Some states might choose not to enforce registration for charities that do not meet the criteria but are soliciting through platforms that do register.

• Advice for Charities:

  • Monitor Contributions: Keep track of where donations are coming from to assess if registration in additional states is necessary.

  • Legal Consultation: Given the complexity and variation in state laws, consulting with legal experts in nonprofit law can be beneficial for ensuring compliance.

This overview of the Charleston Principles provides a foundation for understanding how charities should approach online fundraising in terms of state registration. For detailed compliance, charities should refer to specific state laws or seek professional advice, ensuring they can focus on their mission without legal distractions.