Fundraising Regulations

Registering with the NYS Charities Bureau

Fundraising professionals are required by law to register annually and file fundraising contracts with the Attorney General's Office. Additionally, depending on the nature of their activities, financial reports must also be filed. Fundraising and grant writing consultants are considered fundraising professionals and are required by the New York State’s Department of Law’s Charities Bureau to be a registered Fund Raising Counsel (FRC).

The State’s definition of FRC is as follows:
“Any person who for compensation consults with a charitable organization or who plans, manages, advises or assists with respect to the solicitation in this state of contributions for or on behalf of a charitable organization, but who does not have access to contributions or other receipts from a solicitation or authority to pay expenses associated with a solicitation and who does not solicit. A bona fide officer, volunteer, or employee of a charitable organization or an attorney at law retained by a charitable organization, shall not be deemed a FRC.”

The difference between a Professional Fundraiser (PFR) and Professional Solicitor (PS) and Fund Raising Counsel (FRC) is primarily that a FRP and PS asks for money; a FRC does not. FRCs plan, manage, advise, assist and ghost write for their clients. Special event coordinators and telemarketers are PFRs because they directly ask for money.

Although becoming a FRC is not publicized or recommended, for example, when a fundraising or grant professional becomes incorporated with the State of New York, it is required by the state. Ignorance of the law is no excuse. Registration is NOT required for employees, volunteers or officers of charitable organizations and employees of a fund raising counsels who are already registered.

Process

  • Initially register with the State (CHAR 016B form).
  • Send in a Contract Certification Form (CHAR 016A) for each client along with a copy of your signed contract between you and your client.
  • Each time you renew a contract with an existing client or gain a new client, you need to send in the new signed client contract along with the CHAR 016A cover form.
  • Annually complete CHAR 016B from on your registration date.

Tips regarding the initial registration process

  • Applications can be downloaded from www.charitiesnys.com.
  • To initially register, complete form CHARO14 and send it in with an $800 registration fee and copies of all organizing documents, amendments to organizing documents, certificates of assumed name and “doing business as” (d/b/a) certificates.
  • Copies of all current contracts with charitable organizations are also required to be sent in along with any contracts you have. However, it is recommended to first send in your initial application, get approved, and then send in your contracts with their individual cover sheets at a later date.
  • Before you can begin work for a client you must submit your client contract to the Attorney General’s office for approval (which takes up to 15 days). So from the time you agree to do business, send the client a contract, receive their signature, mail a copy of the contract with cover sheet to Albany, and get approval, it can take up to a month. By law you are not supposed to be working for that client during that time.
  • The Cover Page form CHARO16A must always be submitted with every contract submitted to the Attorney General’s Office.
  • Your contracts must include special “cancellation” language that is found on CHAR016B form. In lieu of your own contract, you can have your client sign CHAR016B form. It is recommended however to use your own contract so you can spell out other information like scope of services provided, cost, reimbursable expenses, etc.
  • All correspondence with the Charities Bureau must be done via mail. Faxed or electronic delivery service is not accepted.

What the law says:

  • No charity can enter into a contract or employ a PFR or FRC unless the PFR or FRC is registered.
  • A PFR or FRC cannot do work for a charity that is not registered.
  • No PFR or FRC can do work until their signed client contract is sent to the State and approved.
  • Charities have the right to cancel a contract without cost, penalty or liability for a period of 15 days following the date the contract is filed with the State.
  • PFR or FRC must discontinue their service upon receiving notice of cancellation.
  • Your client contract must contain certain language (See CHAR 016A form).

If you do not register and operate illegally

  • If you operate a business as a grant writer or fundraiser in New York State and are not registered, and are caught, the Attorney General’s Office can go back for every year you’ve operated as a grants or fundraising consultant without registering and charge you $800.00 per year. Violation of the law is also punishable by fines and jail time.
  • The bottom line . . . if you are a fundraiser or grant writer in New York State, you must register.
  • Two exceptions – Grant writers and fundraisers employed by a nonprofit organization or grant writers and fundraisers who work for a grant writer or fundraiser who is registered are exempt. Only independent grant writing and fundraising consultants need to register.

Benefits of Registration

  • Many nonprofits view the FRC as a distinction like the GPC or CFRE and wrongly assume that it qualifies and recognizes the professionalism of grants and fundraising consultants. Since few grant writers and fundraisers in New York State are registered, use your registration as a selling tool.  Promote your registration; mention it on your business card, brochure and web site.
  • Another important benefit is that you don’t have to fear operating illegally in New York State.

The above information is for informational purposes only and only covers a few of the rules and regulations governing grant writers and fundraisers.  For a complete listing of rules, regulations, forms, etc. visit the New York State Charities Bureau Web site at http://www.charitiesnys.com. Any questions should be directed to the NYS Charities Bureau staff.



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