Funding
Frequently Asked Questions about Funding
According to the Association of Fundraising Professionals (AFP), these terms are all concerned with the donor’s intent. The AFP offers these definitions. Planned giving frames a donation within a structured system. The donation is usually transmitted through some sort of legal instrument, such as a trust or a will. Many planned giving programs include some elements of deferred giving. A deferred gift is a gift that has been pledged to a nonprofit but will not be available until some future date, such as the donor’s death. A major gift is a significant gift to an organization. The amount before a donation is classified as a major gift is left to the discretion of the organization.
Iowa Code §13C.2 requires that professional fundraisers register with the attorney general. Iowa Code §13C.2(1)(a). The Iowa Code also requires that professional fundraisers disclose contributions received and payments made to the client charities. This disclosure can be done at the time of registration with the Iowa Attorney General's office or by filing a statement agreeing to provide disclosure information to a government entity or a person within one day of a request. Iowa Code §13C.2(1)(b),(c). Additionally, charitable organizations are required to provide financial disclosure information to requesting parties within five days of a request. Iowa Code §13C.2(2). If either the professional fundraiser or the charitable organization fails to provide financial disclosure information when requested, the attorney general may seek an injunction prohibiting further fundraising until such disclosure information is provided. Iowa Code §13C.3(b). See this article on in-state fundraising for a more complete answer.
For the most part, many states have not developed clear Internet fundraising registration requirements. However, some states are in the process of assessing their Internet fundraising policies, so nonprofits need to keep abreast of potential changes. As a safe practice, nonprofits may want to review the Charleston Principles, suggested Internet fundraising guidelines released by the National Association of State Charity Officials (NASCO). The guidelines are non-binding and were designed to assist states in developing their own regulatory schemes. The Principles suggest that nonprofits domiciled within a state register within that state. It is also suggested that organizations outside of a particular state should register with that state if they target residents of that state, or if they receive funds from residents of that state on an “ongoing” or “substantial” basis. The Principles leave definitions of these terms up to the states.
According to law a pledge may be a binding contract. Courts will usually enforce pledges if the organization can show that it substantially and reasonably relied on the pledge. However regardless of whether or not a nonprofit is legally entitled to pledged money the more important issue is how to determine when it is appropriate for a nonprofit to sue to recover a pledge. Such determinations can only be made on a case-by-case basis. Relevant considerations are the overall impact of the gift on the organization, the likelihood that the donor will make future gifts, the opinion of the board of directors, and community perception.