If your nonprofit is engaged in fundraising, whether through direct mail, phone calls, or online campaigns, you’re likely aware that many states have specific rules regarding what information must be disclosed to potential donors. These disclosure requirements are designed to promote transparency, protect donors, and ensure that charitable organizations are held accountable for how they use the funds they receive.

This article will explore what Uniform Disclosure Statements are, why they matter, and how your organization can comply with state-specific disclosure laws when soliciting donations.

What Are Uniform Disclosure Statements?

A Uniform Disclosure Statement is a written statement required by certain states that nonprofits must include when soliciting donations. The purpose of these disclosures is to ensure that donors are provided with key information about how their donations will be used and the nonprofit’s legal and financial standing. 

Many, if not most, nonprofit leaders know that donor can research the organizations they donate to, the state disclosure laws help make more donors aware that they have that power as well. While disclosure requirements vary by state, the basic idea is to provide transparency and foster trust between nonprofits and potential donors. In general, these disclosures inform donors about:

• The nonprofit’s legal name
• How donations will be used (including whether any portion of the donation will go to fundraising expenses or professional fundraisers)
• The nonprofit’s registration status in the state (if applicable)
• How a donor can obtain additional financial information about the nonprofit

Why Are Disclosure Statements Important?

Disclosures help build trust with donors and ensure that they have access to accurate information before contributing. Here’s why compliance with disclosure requirements is so important:

• Transparency: Donors can make informed decisions about whether to contribute to your cause. This is particularly important when the charity might be new to a donor or when a fundraising appeal is very broad, such as online campaigns.
• Legal Compliance: Many states require that charitable solicitations provide certain disclosures. Failing to comply with these rules can result in penalties, fines, or even restrictions on your ability to raise funds in that state.
• Avoiding Misleading Practices: Disclosures also protect your nonprofit from accusations of misleading fundraising practices, as they provide donors with clear information about how their donations will be used.

What Information Must Be Disclosed?

The exact information that must be disclosed depends on the state, but most states require at least the following:

• The Name of the Charity: Nonprofits must include their official legal name in any solicitation.
• The Purpose of the Solicitation: In some states, you need to disclose the specific purpose of the solicitation, or at least indicate whether donations will be used for a general fund or a specific program or initiative.
• Fundraising Expenses: States often require that you disclose whether a portion of the donations will go toward fundraising expenses or professional fundraisers. For example, some states mandate a statement like, “A significant portion of your donation may be used for fundraising costs.”
• Financial Information: In some states, nonprofits must provide a means for donors to access the charity’s most recent financial statements. This could be through a phone number, email address, or a direct link to financial documents on the charity’s website.
• Registration Status: Some states require nonprofits to inform potential donors about whether the organization is registered to solicit funds in that particular state. This is often the case for larger states like California, New York, or Florida, where the solicitation of donations must comply with the state’s charity registration requirements.

How to Comply with Disclosure Requirements

1. Online Fundraising

If your nonprofit conducts online fundraising, the disclosure requirements can usually be met by providing a clear and easily accessible link to the required information.

You may, for example, include a link to your disclosure statement on your donation page or website. This link should direct users to a page that explains your nonprofit’s legal name, fundraising expenses, and financial reporting.

Or you may provide key disclosures directly on the donation form. While a full disclosure might not be necessary, many states require a brief notice (such as “A portion of your donation may go to fundraising costs”) on the page where the donation is made.

In general, you should ensure that any required disclosure is visible to the donor before they make a donation, and the information should be easily accessible through a link or a simple summary on the donation page.

2. Mail Fundraising

For mail-based solicitations, disclosures are typically required to be included directly within the mailed materials. This might include attaching a separate document that includes the necessary disclosure information, or including the disclosures within the body of the solicitation letter (e.g., a paragraph explaining how the funds will be used and where donors can get more financial information)

Ensure that the disclosures are not hidden in small print or buried in the back of the letter, as this may be viewed as non-compliant or deceptive. Some states require that the disclosure be presented in no smaller than 10-point font.

3. Phone or In-Person Solicitations

While phone solicitations and in-person events are less common for many online-focused nonprofits, if your organization uses these methods, you should ensure that verbal disclosures are provided. Additionally, you may need to provide written materials at events or over the phone that include the required disclosures about how donations will be used and any associated fundraising costs.

State-Specific Disclosure Rules

While there are common requirements across many states, each state has its own rules. Some states are more lenient and only require disclosures if you raise a certain amount of funds or solicit donations from a particular percentage of residents, while others are more stringent, requiring detailed information even for smaller donations.

For example:

– California: Requires that charitable solicitations include a statement that donors can obtain a copy of the nonprofit’s most recent financial statement upon request. The nonprofit must also include their registration number, if applicable.

– Florida: Requires that fundraisers disclose their registration status in Florida and that a certain percentage of contributions be used for the charitable purposes, not administrative expenses.

– New York: Nonprofits soliciting donations in New York must disclose that they are registered with the New York Attorney General’s office and provide information on how donors can obtain a copy of their most recent financial report.

Given the complexity of these requirements, it’s essential to understand the specific rules for each state where you plan to solicit donations. 

Free Template for Disclosure Statements

To help your nonprofit comply with these various disclosure laws, our firm has created a uniform disclosure statement template that meets many of the most common requirements across states. This template is easy to customize and can be used for both online and mail solicitations.

You can download the disclosure statement template here.

Using this template can save time and help ensure that you meet the disclosure requirements for multiple states.

Final Thoughts

Meeting state-specific disclosure requirements is a critical part of complying with charitable solicitation laws, especially if you’re raising funds in multiple jurisdictions. Whether you’re running an online campaign or conducting a mail-based solicitation, make sure you’re providing donors with the clear and accurate information they need to feel confident in supporting your nonprofit.

By ensuring your disclosures are clear, accessible, and complete, you not only comply with the law but also build trust with your donors—a key factor in any successful fundraising effort.

If you need help navigating the disclosure requirements in different states or if you need assistance customizing the provided template for your nonprofit, we’re here to help. Feel free to reach out for a consultation or to learn more about how to ensure your fundraising campaigns stay fully compliant.