Is Your Fundraising Consultant Registered with New York State?
Most nonprofits have never heard of this requirement. That's a problem.
Here is a question many nonprofit executives and board members have not considered:
Is your fundraising consultant registered as Fund Raising Counsel with the New York State Attorney General's Charities Bureau?
If you hired a consultant to help with your annual fund, your major gifts program, your capital campaign, or your donor communications, and that consultant is working with New York donors or a New York-based organization, the law requires them to be registered. And it requires you to hire only registered professionals.
Many people are unaware of this requirement. Consultants and organizations alike operate in violation of these requirements every day, without any idea they are doing so.
The law is clear, and it applies to both parties.
New York Executive Law Article 7-A governs fundraising professionals who work with charitable organizations in New York State. The statute is administered by the Attorney General's Charities Bureau, and it is not ambiguous: it is illegal to act as a fundraising professional without registration, and it is illegal to hire one who is not registered.
That exposure sits with both parties.
Four categories of fundraising professionals. The distinctions matter.
The statute defines four categories of fundraising professionals. Understanding where your consultant or vendor falls is essential because the registration requirements, bonding obligations, and legal responsibilities are different for each.
Fund Raising Counsel (FRC) is a person who, for compensation, provides consulting, advice, or assistance to a charitable organization in connection with its fundraising efforts, but who does not solicit funds directly, does not have custody of contributions, and does not employ anyone to solicit on behalf of the organization. This is the category that describes most independent fundraising consultants: people who help you develop strategy, build systems, train staff, write donor communications, or manage campaigns from the inside.
Professional Fund Raiser (PFR) is a person or firm that directly solicits contributions on behalf of a charitable organization, often under a paid contract. Telemarketing firms, direct mail houses, and outside solicitation firms typically fall into this category. PFRs are required to post a surety bond with the state, file interim and closing financial statements showing how funds were handled, and comply with additional disclosure requirements. This is the category most people think of when they picture paid fundraisers, the ones who raise a lot of money on an organization's behalf but keep a substantial percentage for themselves.
Professional Solicitor is a person who is employed or retained for compensation by a Professional Fund Raiser to solicit contributions from persons in the state. The key distinction here is that a Professional Solicitor works for the PFR, not directly for the nonprofit. They are the individuals making the actual calls or door-to-door asks on behalf of the PFR's campaigns. Professional Solicitors must register separately with the state under Section 173-b of Article 7-A before engaging in any solicitation activity.
Commercial Co-Venturer (CCV) is a for-profit business that advertises that the purchase or use of its goods, services, or entertainment will benefit a charitable organization. The classic example is a retailer that promotes that a percentage of sales during a campaign period will go to a named charity. CCVs are subject to specific contract, reporting, and disclosure requirements. Within 90 days after the end of a sales promotion, the CCV must provide the charitable organization with a full accounting of items sold and amounts raised.
The distinctions matter because misclassification, or simply not knowing the difference, can create real legal exposure for both the organization and the professional.
Who can legally solicit funds on behalf of a nonprofit?
Under Article 7-A, the following people are permitted to ask for charitable contributions:
- Paid staff of the charitable organization
- Volunteers, including board members
- Professional Fund Raisers (PFR) who are appropriately bonded and registered with the state
- Professional Solicitors working under a registered PFR
Notably, individuals who are registered as Fund Raising Counsel (FRC) cannot solicit. Their role is advisory only.
Two important carve-outs worth noting. First, marketing and communications professionals who are updating a website, creating graphic design materials, or printing direct mail are generally not considered to be soliciting funds, even if those materials are ultimately used to raise money. The statute is focused on the act of asking, not on the production of materials used to support that ask.
Second, the statute specifically exempts individuals engaged solely to draft applications for funding from a government agency or from a 501(c)(3) tax-exempt organization. In practical terms, this means that a grantwriter whose work is limited to drafting applications to government sources or to charitable foundations is generally not required to register as Fund Raising Counsel. The moment that scope expands to include advisory or strategic fundraising work, however, registration requirements may apply. The boundaries here can be nuanced, and if there is any question about whether a particular engagement triggers registration, consulting a qualified nonprofit attorney is the right step.
For the full statutory language, see New York Executive Law Article 7-A, Section 171-a, which defines Fund Raising Counsel, Professional Fund Raisers, Professional Solicitors, Commercial Co-Venturers, and the scope of the law.
What the registration process actually involves.
For Fund Raising Counsel, the registration process includes:
- Filing Form CHAR014 (Fund Raising Counsel Registration Statement) with the NYS Attorney General's Charities Bureau
- Paying the required annual registration fee
- Receiving approval from the state before beginning any work under a registered engagement
Once registered, the consultant must file a written contract with every charitable organization client with the Charities Bureau within ten days of signing. The contract must contain specific language required by law, including a clear description of services, the financial arrangement, and, critically, a statement of the organization's right to cancel the contract.
The cancellation window is important. Under the statute, no services may be performed until the contract has been on file with the Charities Bureau for at least fifteen days, or until the Charities Bureau has acknowledged receipt, whichever is shorter. That means there is a mandatory waiting period built into every engagement. Organizations and consultants who don't know this often start work immediately after signing, which is a violation.
This also means that when you are planning a fundraising engagement, you need to build extra time into the start of the process to allow for registration, contract filing, and the required waiting period.
This isn't just a New York issue.
New York is among the most rigorous states in the country, but it is far from alone. According to Labyrinth Inc., a multistate registration resource, 44 states require paid solicitors to be licensed, 38 require surety bonds, and 43 require contract approval before work begins. If your organization works with donors in multiple states, or if your consultant works with organizations across state lines, the compliance picture gets more complicated.
What this means for your organization.
If you have hired or are considering hiring a fundraising consultant, ask them directly: Are you registered as Fund Raising Counsel with New York State? Can you provide your registration number? Have you filed our contract with the Charities Bureau?
If the answer to any of these questions is no, or if they don't know what you're talking about, that is information you need before you sign anything.
You can verify registration status and access all required forms through the NYS Attorney General's Charities Bureau fundraising professionals page.
If you have questions about what this means for your organization or how to verify your current consultant's status, reach out directly.
This post is provided for informational purposes and does not constitute legal advice. For guidance specific to your organization's situation, consult a qualified nonprofit attorney.