III. Laws that Govern Professional Fundraisers
I. Introduction II. Laws that Govern Charitable Organizations III. Laws that Govern Professional Fundraisers IV. Laws that Govern Chatitable Trusts V. Minnesota-Organized Nonprofits and Charitable Gambling VI. When Nonprofits Must Provide Notice to the Attorney General VII. Uniform Prudent Management of Institutional Funds Act Appendix
The Charitable Solicitation Act, Minn. Stat. §§ 309.50-.61, regulates “professional fundraisers” in addition to charitable organizations. Professional fundraisers are persons and businesses who charities hire to solicit donations on their behalf, or who advise, consult, or otherwise assist the charity in soliciting donations. Like charities, professional fundraisers are also required to register with the Attorney General’s Office.
Definition of Professional Fundraiser
Minnesota law broadly defines the term “professional fundraiser” to include any person (including a corporation or other artificial entity) who, for compensation or profit, engages in either of the following types of activities:(43)
- Soliciting donations for a charity, or performing for a charity any service in connection with which donations are solicited by the compensated person or by any compensated individual that the person employs to solicit; or
- Planning, managing, advising, consulting, or preparing material for—or with respect to—another person’s solicitation of donations in Minnesota.
The first type of professional fundraiser is commonly referred to as a “soliciting” professional fundraiser. The second type is commonly referred to as a “consulting” professional fundraiser.
Bona fide employees or volunteers of the charitable organization are not considered professional fundraisers even if they solicit donations for the charity.(44) Certain licensed professionals—including lawyers, investment advisers and broker-dealers, accountants, and bankers—are not considered professional fundraisers merely because they advise a person to make a donation or provide professional services to a charity.(45) Auctioneers who do not have access to the proceeds of the auction are also not considered professional fundraisers.(46)
Registration and Annual Reporting by Professional Fundraisers
Professional fundraisers are required to register with the Attorney General’s Office. A professional fundraiser’s registration expires each year, and must be renewed annually by May 1.(47)
The registration materials a professional fundraiser must file—both when initially registering and when re-registering annually—differ depending on whether it is a “soliciting” professional fundraiser or a “consulting” professional fundraiser. The difference between “soliciting” and “consulting” professional fundraisers is discussed above.
Materials All Professional Fundraisers Must File
All professional fundraisers must file the following materials when registering for the first time, and when
The registration statement is a form provided by the Attorney General’s Office that must be fully, accurately, and truthfully completed.
2. Written Contract With Charity
All professional fundraisers, regardless of whether or not they solicit, must have a written contract with each charity to which they provide any type of goods or services. Each contract between a charity and a professional fundraiser must contain the following information:
- a detailed description of the goods and services the professional fundraiser will be providing to the charity;
- identify whether the professional fundraiser will at any time have custody of, or access to, donations made to the charity;
- if the professional fundraiser is a soliciting professional fundraiser, the contract must also disclose the percentage or a reasonable estimate of the percentage of the total amount solicited that will be remitted to the charity and retained by the professional fundraiser; and
- be signed by two officers of the charity.
3. Registration Fee
A registration fee of $200 payable to the “State of Minnesota.” This fee may be paid electronically with a credit or debit card using the "Electronic Payment of Registration Fees" webpage on the Attorney General’s Office’s website, or by check through the mail.
A professional fundraiser must file a bond of $20,000 if it will at any time have custody of, or access to, donations made to the charity. The Attorney General’s Office provides forms on its website for use in satisfying these bonding requirements for professional fundraisers that must file a bond.
Additional Materials “Soliciting” Professional Fundraisers Must File
In addition to the above materials, soliciting professional fundraisers must also file the following materials when registering for the first time and when re-registering annually:
The solicitation notice is a form provided by the Attorney General’s Office that contains information about the professional fundraiser’s solicitation activities on behalf of a particular charitable organization. The charity on whose behalf the professional fundraiser is acting must certify that the solicitation notice and accompanying material are true and complete.
- A professional fundraiser soliciting for more than one charity must file a solicitation notice for each charity on whose behalf it is soliciting.
- The requirement to file a solicitation notice is not limited to professional fundraisers who have custody of, or access to, donations.
A solicitation campaign financial report is a form provided by the Attorney General’s Office. Professional fundraisers must file a solicitation campaign financial report for every charity for which they solicited in Minnesota during the previous year. The report must be filed within 90 days after the completion of a campaign, and within 90 days following the anniversary of the commencement of a campaign lasting more than one year. The truthfulness and accuracy of each campaign financial report must certified, under oath, by both the professional fundraiser and the charity.
- The requirement to file a solicitation campaign financial report is not limited to professional fundraisers who have custody of, or access to, donations.
Effect of Failure to Timely File
The registration of professional fundraisers that fail to submit their registration materials expires on May 1 each year. Such professional fundraisers must properly re-register and pay a late fee of $300 before they are permitted to solicit in Minnesota again. The late fee is in addition to the $200 registration fee.(48)
Disclosure Requirements for Soliciting Professional Fundraisers
Minnesota law requires soliciting professional fundraisers to make various disclosures to prospective donors when soliciting contributions. These disclosures include providing certain information about the charity and its charitable programing, the professional fundraiser’s name as on file with the Attorney General’s Office, and that the solicitation is being conducted by a “professional fundraiser.”(49) The disclosures must be made prior to or contemporaneously with the request for a donation. See the section entitled “Disclosure Requirements for Charitable Organizations” for additional information on the disclosures that professional fundraisers must make to prospective donors.
Other Minnesota Laws That May Apply to Professional Fundraisers
Other state and federal statutes and regulations not addressed in this publication may also govern professional fundraisers’ activities. For example, Minnesota law prohibits the use of an automatic dialing-announcing device, commonly known as “robocalls,” except under limited circumstances.(50) It is unlawful for professional fundraisers to engage in any deceptive, fraudulent, or misleading practices in connection with any charitable solicitation under the Charitable Solicitation Act.(51) Such conduct may also violate Minnesota’s consumer protection laws.(52) Various federal telemarketing statutes may apply to donations solicited over the phone as well.(53) Professional fundraisers must comply with all laws applicable to their conduct, not just the statutes referenced in this publication.