Online Compendium of Federal and State Regulations for U.S. Nonprofit Organizations

How Many Soliciting Nonprofit Organizations
Have Registered Nationwide?

What Data Did This Study Collect?

The data presented below are the results of a study to determine the number of nonprofit organizations that have registered to solicit nationwide. Thirty-eight states and the District of Columbia require nonprofit organizations that solicit contributions in their state to register. The solicitation registries of five states, Maryland¹, Minnesota², Washington³, Tennesee⁴ and Oregon⁵, were examined in this study.

The set of out-of-state registrants for each of the five solicitation registries were compared to identify those organizations that had registered in more than one state. Organizations registered in all states examined may be considered "nationwide registrants." Organizations that appeared in at least three of the five state solicitor registries examined were deemed to be "widely registered," i.e. likely to be registered in most regulating states, though not necessarily all. This set of 742 widely registered organization is probably a nearly complete collection of nonprofit organizations that lawfully (or nearly lawfully) perform nationwide fundraising using traditional methods (e.g. postal mail and telephone). The data sheet that was prepared for Illinois is provided as an example of the analysis process that led to the summary figures given below.

Note that not all the organizations in the state registries are necessarily 501(c)(3) public charities, although most are. Some are 501(c)(3) private foundations, others are 501(c)(4) organizations, etc. Schools, hospitals, and religious organizations are generally either exempt from state registration requirements or don't solicit outside their locale, and therefore don't generally appear in the set of nationwide registrants. Professional solicitors and fundraising consultants are also not included in these registries.

A mailing list is available from the study's author, which has been derived from the list of nationwide nonprofit organization registrants and gives the name and address of each. The complete data set is also available.

What Conclusions Can Be Drawn?

1. The number of nonprofit organizations registered to solicit nationwide is 268 or fewer.

The study found 268 nonprofit organizations registered to solicit in all five states examined. It is reasonable to expect that if more states were examined, some of these organizations would not be registered in every other state, therefore 268 is an upper limit for the number of nationwide registrants.

2. The number of nonprofit organizations registered widely is approximately 750 or possibly somewhat more.

The study found 742 nonprofit organizations registered in at least three of the five states examined. The registrations for individual organizations are generally not clustered geographically, which might have suggested that these 742 are only registering regionally, but instead have typically registered in at least one state far from their main office. Therefore it is reasonable to conclude that these 742 are nationwide registrants, although only 268 were actually registered in five of five states. It is likely that examining more states would reveal some modest number of additional organization registered in a majority, but not every, state examined.

Since it is reasonable to assume that organizations would not go through the effort and expense of registering if they didn't intend to solicit in a state, the number of nonprofit organizations that solicit widely (i.e. outside their region, and probably nationwide) is approximately 750. This assumes most organizations that solicit nationwide make at least some effort to fulfill state registration requirements, which may not be true. If many organizations do not comply with state laws and regulations, there may be many more than 750 organizations that solicit nationwide.

3. Most of the nonprofit organizations registered to solicit nationwide are located in only a few states.

The study found that 56% of the widely registered nonprofit organizations are in only four jurisdictions: California, New York, Virginia, and Washington, D.C. If one examines only organizations registered in five of the five jurisdictions examined, the proportion from those jurisdictions is 57%, essentially the same. However, this is a fairly slim majority. A very significant proportion of nonprofit organizations that probably solicit nationwide are scattered among the other states.

4. The majority of widely registered nonprofit organizations are not registered in every state.

Although 742 widely registered nonprofit organizations were found, only 268 of these are registered in every state. For the states and organizations examined, 64% (474) of the widely registered organizations showed incomplete nationwide coverage. There are some reasonable explanations for some part of this segment, other than that these organizations have only partially completed the registration requirements that their solicitation activities would require by law. Some state registries include organizations registered in the recent past (i.e. two years), but whose registration is not current. Therefore, some organizations identified here as widely but incompletely registered may have allowed their registrations to lapse because they are no longer soliciting nationwide. Other organizations may have branches or chapters in many but not all states, and therefore only be registered in the states where they are active. Although more research would be required to determine exactly why so many organizations have incomplete nationwide registration, it seems most likely to this author that these organization simply have not insured their solicitation registrations are complete and up-to-date.

What Are Some Implications?

In casual discussion among participants in one mail-list devoted to nonprofit organization issues, the estimates for how many organizations solicit nationwide ranged up to 2000.⁶ Although this may be so, the present study has demonstrated that it is very unlikely that many organizations are actually registered to solicit nationwide. This study has also demonstrated a significant number, approximately 474 among the state registries examined, that have only incompletely registered nationwide, although they generally have registered in at least one state distant from their office, suggesting they solicit nationwide. The number of incomplete registrants is likely to be larger, as examining additional state registries would probably reveal more incomplete registrants. It seems likely that a significant number of these organizations are simply soliciting without complying with the applicable state laws and regulations.

Although many state laws explicitly allow solicitation regulatory agencies to share their records with other states, it seems likely that this has not be done thus far to identify organizations soliciting nationwide without the legally required registrations. That this study was fairly easily performed using publicly available data suggests some lack of vigilance with regard to enforcing registration requirements, which is supported by the widespread perception that state regulators only investigate nonprofit organizations when they receive public complaints. This is most likely due to limited resources, which are devoted instead to investigating reported cases of fraud.

Since many nonprofit organizations are interested in using the Internet for soliciting donations, it is worth considering the implications this study's results might have for state registration as online solicitations become widespread. One database of nonprofit organizations⁷ shows approximately 13,000 have Web pages online at this time, and more use email. Furthermore, a recent study of Internet domain names⁸ reveals approximately 70,000 second-level domains (i.e. xxxx.org) ending in ".org" and therefore belonging to nonprofit organizations. Although both these numbers include non-U.S. organizations, the predominance of U.S. organizations both in the world-wide nonprofit sector and in the online world implies that a very strong majority of these Internet Web sites and domain names belong to U.S. organizations.

Although the vast majority of funds raised by solicitations almost certainly results from traditional solicitation methods at this time, it is clear that, from a regulatory perspective, the traditional set of organizations that solicit using these methods comprise only a tiny fraction of the number of organizations potentially soliciting online and subject to registration requirements under existing laws and regulation. Further study will be required to determine the proportion of nonprofit organizations currently soliciting online. However, as current regulations only address whether solicitation is performed, and not the numbers of people receiving them or necessarily the amount donated as a result, it is clear that if state regulators intend to enforce the law as written they will soon need to focus primarily upon solicitations conducted through the Internet rather than by traditional mechanisms.

This study was conducted by Eric Mercer in the course of developing the Online Compendium of Federal and State Regulations for U.S. Nonprofit Organizations <http://www.muridae.com/nporegulation/>. The author would like to thank Dayna Marcha, of the Oregon Dept. of Justice's Charitable Activities Section, David Ormstedt, Connecticut Assistant Attorney General, and Patricia Novo, Director of Operations for Action Without Borders, for providing additional data beyond that already available on the Internet, and Geoffry Peters for his insights and encouragement.

Table A-1

Out-of-State Registration of Nonprofit Organizations That Solicit Contributions

Home State Isi	Registered to Solicit Ine						Public Charities IRS Registered w/ Financial Data (1996)	Number of Organizations Registered to Solicit in					Fraction of All Solicitors Registered in at Least 3 of 5 States	Fraction of all IRS Registered Public Charities w/ Financial Data
	Maryland	Minnesota	Washington	Oregonc	Tennessee	Pennsylvaniaj		5 of 5 States Examined	4 or More States Examined	3 or More States Examined	2 or More States Examined	Any States Examined
Alabama (AL)	2	3	2	2	6	3	2,244	2	2	2	3	6	0.3%	1.1%
Alaska (AK)	1	1	2	2	1	1	827	1	1	1	1	3	0.1%	0.4%
Arizona (AZ)	12	18	13	14	6	8	2,563	4	8	10	11	30	1.3%	1.3%
Arkansas (AR)	4	5	4	4	3	4	1,534	3	4	4	4	5	0.5%	0.8%
California (CA)	99	94	105	155	42	66	23,016	26	47	73	109	240	9.8%	11.5%
Colorado (CO)	21	32	25	28	13	20	3,771	5	12	16	29	57	2.2%	1.9%
Connecticut (CT)	14	14	12	13	11	12	3,432	7	8	13	15	21	1.8%	1.7%
Delaware (DE)	13b	0	0	0	1	13	753	0	0	0	1	13	0.0%	0.4%
Washington D.C. (DC)	366	182	165	169	75	155	2,846	52	116	156	198	435	21.0%	1.4%
Florida (FL)	41	43	35	36	22	39	7,795	16	23	25	40	73	3.4%	3.9%
Georgia (GA)	17	18	15	19	14	14	4,001	10	12	15	18	28	2.0%	2.0%
Hawaii (HI)	0	2	0	1	0	0	1,005	0	0	0	0	3	0.0%	0.5%
Idaho (ID)	0	0	8	12	0	1	741	0	0	0	0	20	0.0%	0.4%
Illinois (IL)	35	44	32	43	17	33	8,292	4	20	26	38	83	3.5%	4.1%
Indiana (IN)	6	8	9	8	8	6	4,380	3	4	5	7	20	0.7%	2.2%
Iowa (IA)	2	5	1	2	1	1	2,570	1	1	1	1	7	0.1%	1.3%
Kansas (KS)	2	3	3	4	0	3	2,231	0	1	1	3	7	0.1%	1.1%
Kentucky (KY)	9	9	11	10	9	7	2,461	5	6	9	11	17	1.2%	1.2%
Louisiana (LA)	4	3	3	1	1	7	2,175	0	1	1	2	8	0.1%	1.1%
Maine (ME)	3	0	1	1	0	2	1,447	0	0	0	1	4	0.0%	0.7%
Maryland (MD)	-a	48	47	48	27	58	4,318	0	23	33	42	72	4.4%	2.2%
Massachusetts (MA)	29	33	27	25	10	30	6,964	8	15	20	27	54	2.7%	3.5%
Michigan (MI)	12	11	11	11	5	10	6,158	4	6	7	12	21	0.9%	3.1%
Minnesota (MN)	10	-	10	13	3	14	4,719	0	3	6	8	19	0.8%	2.4%
Mississippi (MS)	2	2	2	1	2	1	1,172	0	1	2	2	4	0.3%	0.6%
Missouri (MO)	14	17	19	12	11	19	4,009	5	7	11	17	33	1.5%	2.0%
Montana (MT)	2	4	6	7	1	2	1,058	0	0	2	5	13	0.3%	0.5%
Nebraska (NE)	7	9	7	7	4	4	1,621	3	4	7	9	11	0.9%	0.8%
Nevada (NV)	3	2	5	9	1	1	678	0	1	1	2	16	0.1%	0.3%
New Hampshire (NH)	2	1	1	2	1	2	1,226	1	1	1	1	3	0.1%	0.6%
New Jersey (NJ)	25	17	21	23	6	53	5,377	6	13	15	21	37	2.0%	2.7%
New Mexico (NM)	2	5	4	5	1	2	1,447	0	1	2	3	11	0.3%	0.7%
New York (NY)	148	132	119	124	62	158	15,816	40	79	101	130	235	13.6%	7.9%
North Carolina (NC)	8	18	12	12	10	13	5,397	3	6	8	12	31	1.1%	2.7%
North Dakota (ND)	0	34	1	1	0	0	775	0	0	1	1	34	0.1%	0.4%
Ohio (OH)	12	10	11	11	8	19	8,980	4	7	8	11	22	1.1%	4.5%
Oklahoma (OK)	2	3	4	4	1	3	2,205	1	2	3	3	5	0.4%	1.1%
Oregon (OR)	5	7	45	-	3	10	3,031	0	3	4	5	48	0.5%	1.5%
Pennsylvania (PA)	46	24	23	21	17	-	10,231	11	17	19	22	62	2.6%	5.1%
Rhode Island (RI)	1	2	2	4	1	2	1,143	1	1	2	2	4	0.3%	0.6%
South Carolina (SC)	2	6	2	3	2	1	2,076	1	2	2	3	7	0.3%	1.0%
South Dakota (SD)	3	16	8	7	3	4	763	2	3	5	6	21	0.7%	0.4%
Tennessee (TN)	12	13	10	12	-	10	3,312	0	6	9	10	22	1.2%	1.7%
Texas (TX)	24	27	18	21	15	15	10,722	2	12	16	20	55	2.2%	5.4%
Utah (UT)	2	4	1	2	0	2	875	0	0	1	2	6	0.1%	0.4%
Vermont (VT)	3	2	1	1	0	2	961	0	0	1	1	5	0.1%	0.5%
Virginia (VA)	163	102	83	98	60	91	5,403	36	62	84	110	214	11.3%	2.7%
Washington (WA)	10	15	-	153	6	9	4,557	0	4	9	12	159	1.2%	2.3%
West Virginia (WV)	6	0	2	0	0	3	1,295	0	0	0	1	7	0.0%	0.6%
Wisconsin (WI)	5	38	5	4	2	5	4,391	1	2	4	5	42	0.5%	2.2%
Wyoming (WY)	0	1	2	1	0	0	4,391	0	0	0	1	3	0.0%	2.2%
Totals	1211	1087	955	1166	492	938	200,084	268	547	742	998	2,356

Table A-2

NOTES

aA "-" indicates the state for which the registry was compiled.

bNumbers are bold if they are probably higher than might be expected because of registrants from a neighboring state.

cThe Oregon data was generated by merging the online database (as of 11Feb99), which is approximately a year out of date, with the current version. A list of out-of-state registrants from the current database was provided by Dayna Marcha, of the Oregon Dept. of Justice's Charitable Activities Section.

dThe Connecticut numbers were provided by David Ormstedt, Connecticut Assistant Attorney General, and aren't available online at this time.

eAll state registry data presented, besides that for Oregonc and Connecticutd as noted, was collected from the online state databases on February 4-19, 1999. They are from the set of organizations on file, not only the set of organizations that have registered in the last year, or that are required to register.

fNumbers of 501(c)(3) public charities registered with the IRS is from NCCS dated 1996. Organizations with less than $25,000 revenue are not required to report annual financial data.

gThe reported state registrants can include organizations that are not required to file, and those whose registration may not be current, but which are retained for a limited time in the state registry. State registries may include more than only 501(c)(3) organizations, as 501(c)(4) and other 501(c) organizations also solicit contributions.

hInformation about exceptions from registration was taken from the state summaries of the Unified Registration Statement materials for charitable solicitors <http://www.nonprofits.org/library/gov/urs/>.

iThe "home state" for registrants was taken to be the one shown by its state registry entry, which generally is its mailing address. Some organizations may actually be incorporated in another state.

jOnly the summary numbers for Pennsylvania were available, so the individual organization analysis did not include this state.

REFERENCES

¹Maryland Charities Database, <http://www.sos.state.md.us/sos/charity/html/search.html>.

²Minnesota Organizations That Solicit Funds, <http://www.ag.state.mn.us/cgi-bin/charitysearch.taf>.

³Washington State Charitable Solicitations Program Registration Data, <http://207.153.159.68/sec_state/charities98/quick.tmpl>.

⁴Tennesee Registered Charities, <http://www.state.tn.us/sos/charity/registeredcharities.htm>.

⁵Oregon Charities Database, <http://www.state.or.us/cgi-bin/OrgQuery.pl>.

⁶This discussion was held on the cyb-acc mail list (nonprofit cyber-accountability) between 2/3/99 and 2/9/99, with the subject "number of multi-state filers."

⁷The idealist.org database and Web site <http://www.idealist.org>, is maintained by the Action Without Borders, a nonprofit organization that promotes the sharing of ideas, information and resources. The numbers given above for nonprofit organizations with Web pages were provided by Patricia Novo, Director of Operations.

⁸Information on registered domain names was obtained from the Network Wizards January 1999 "Internet Domain Survey" <http://www.nw.com/zone/WWW/top.html>.

Prepared for and published at the
Online Compendium of Federal and State Regulations for U.S. Nonprofit Organizations
http://www.muridae.com/nporegulation/
Page last modified 2/25/99