Charitable Solicitations Act: Why You May Need a License to Accept Donations

It may come as a surprise to some, but Maine, like many other states, requires charitable organizations to obtain a charitable solicitation license from the state before soliciting donations within Maine.

The Maine Charitable Solicitations Act (CSA), 9 M.R.S. §§ 5001-5018, regulates “charitable organizations,” which are broadly defined to include entities that hold themselves out as charities and solicit or accept contributions from the public.  Unless a charitable organization is exempt, it must submit a charitable solicitation license application to the Director of the Office of Professional and Occupational Regulation at least thirty days before soliciting or accepting donations. Licensure must be renewed annually, accompanied by an annual fundraising activity report for the previous year.

Some charitable organizations are excluded from the CSA or otherwise exempt from the licensure requirement, including religious organizations, approved educational institutions and student organizations, nonprofit charitable hospitals, and free clinics.  The broadest exemption is for small charitable organizations that, among other requirements, do not intend to solicit or receive donations over $35,000 or from more than 35 people in a single calendar year.  If an organization does not intend to but does solicit or receive donations more than $35,000 or from more than 35 persons in a year, the organization must register within 30 days after the date contributions reached $35,000 or the number of donors reached 35.

Licensed organizations are subject to a number of ongoing requirements, including recordkeeping and financial reporting requirements.  The CSA also requires certain basic disclosures in making solicitations, prohibits certain behavior deemed misleading, and provides for sanctions including suspension or revocation of a license.

Charitable fundraising regulations differ significantly from state to state.  This means that organizations that operate in multiple states need to be aware of and comply with the registration and other requirements of each state in which they operate.

Jonathan P. Hunter, Attorney at Law, Rudman Winchell
Jonathan Hunter, Esq
Rudman Winchell
207-947-4501

 

This article is intended to provide general information only and is not a substitute for legal advice.  For advice regarding your specific circumstances, please do not hesitate to contact Rudman Winchell.