Putting on a Fundraiser? Make Sure You’ve Considered These Legal Issues

About 67 percent of worldwide fundraising donors love to participate in their local community, with another 56 percent regularly attending fundraising events. Those that are volunteering or attending fundraising efforts are just a couple of the exposures nonprofits face. 

Fundraising is a core part of a nonprofit flourishing, which is why any owner should make sure that every legal avenue is explored and considered. Even if it’s just for future reference, having awareness of what your nonprofit might have to deal with can make a huge difference.

In fact, being well-versed could mean the difference between a nonprofit floating or sinking. While many individuals opt for online giving, fundraising efforts face-to-face are something that can’t be beat. However, all of this is contingent on the awareness of what problems can legally arise. These are the legal issues that must be considered by any nonprofit, courtesy of GEVME.

1. You Might Need to Get a License  

Just like with any other public event in the community, getting in touch with the local government to make sure you aren’t missing any vital licensing is key for the entire nonprofit fundraiser to run. If you fail to get permission for your event, it’s highly likely that it can be shut down.

For example, if there’s food there, you might need a catering license. If there’s entertainment, you  might need a license for that as well. Whatever you need, your local city council should be able to get you up to speed for the event.

2. Collecting Money Correctly is Essential

It’s a sensitive issue, meaning collecting fundraising money needs to be done correctly. Collection boxes should be regularly counted, with someone always aware of the figure. At least two people should always be involved in the counting and recording of money. Cash from the fundraiser should be collected by the charity as soon as possible.

3. Charity Information Needs to be Correct on Fundraising Materials

If you don’t have the right registered charity number, things can go south fast. The company and address also needs to be correct on all forms. Making sure that no one feels misled during the fundraiser is absolutely vital for it to go well. Having transparency and honesty means that your donors and volunteers will understand what they are giving and working for, and will reduce the risk of false representation claims.

4. What About Raffles or Lotteries?

Raffles and lotteries are very popular amongst many local events, but frequently require a license. If it’s non-commercial, you’re okay. But other than that, a license is necessary. For example, when an event is put on in a larger fashion, there might be more regulations involved. When there’s more money than $20,000 involved, it requires special protocols.

5. Are Charity Auctions Okay?

Considering charity auctions don’t fall under normal gambling laws, it’s important to know the policies behind them. Make sure that the items being auctioned are properly named and valued. Following trade legislations is essential to ensure that your nonprofit doesn’t fall victim to insurance claims.

6. Is it Okay to Work With a Professional Fundraising Agency?

When you don’t have experience with running a fundraiser, you might look to a third party for assistance. While you might need extra insurance coverage for this idea, it would also be incredibly beneficial to the fundraiser. You can really amp up the money being donated when you work with professionals. It’s all about knowing legal fundraising solutions on the fly. A third party should be able to assist with that.

Putting on a fundraiser should be an opportunity to increase the amount of support that you can bring your cause. The last thing you want is for such an altruistic event to turn into a cost for your business and its reputation. Before putting on a fundraiser, make sure you know the legal ins and outs and protect your operation with a commercial insurance program designed to cover nonprofit organizations like yours.

About David G. Sayles Insurance Services

At David G. Sayles Insurance Services, we strive to protect the investments of business owners like you. Our comprehensive policies are customized for you to provide the exact coverage you need. For more information, contact us today at (800) 439-0292.