In some instances, charities may retain the services of a third-party fundraising professional to assist in their fundraising strategy, solicitation, and other endeavors.
Fundraising professionals may be referenced differently depending upon the state in which they provide services, but generally are called “Commercial Fundraisers” or “Professional Fundraisers” depending upon the specific scope of services provided by the fundraising professional to the charity.
Like charities, fundraising professionals and the fundraising services rendered are heavily regulated by state agencies to ensure the protection of charitable assets and transparency to the public.
Regulation of fundraising professionals varies from mandated registrations and renewal reporting, bond and licensure requirements, and written contracts between the fundraising professional and the charity.
Tovella Dowling represents both fundraising professionals and charities, bringing a unique and holistic perspective to its representation.
Nonprofit organizations engaging with fundraising professionals should be aware of potential legal concerns that may arise before hiring a professional or commercial fundraiser.
The following legal considerations should be evaluated and addressed when entering a fundraising services arrangement:
- Written Agreement between fundraising professional and charity addressing scope and structure of relationship, including any legally mandated terms imposed under state law
- Authorizations or restrictions on subcontractors for fundraising services rendered
- Compensation structure, such as hourly rate, percentage of the money raised, or a combination of both
- Rights of charity to review and approve all final fundraising materials and solicitations
- Delegation of authority, including oversight, accounting, and disbursement obligations if the fundraiser is serving as custodian of charitable funds raised
- Ownership of intellectual property created during the term of fundraising professional retention, including solicitation materials and donor list
- Confidentiality obligations of fundraising professionals, especially regarding donor information
- Representation and warranties as to registration and compliance obligations of charity and fundraising profession
- Clarification as to authorized jurisdictions for fundraising solicitation to avoid inadvertent charitable solicitation registration and compliance obligations
- Notice requirements for compliance filings required of charity and professional fundraisers to ensure consistency in representations made to state regulators
- Disclaimers of fundraising guarantees from charity
Related Focus Areas
View All Focus Areas