Hosting an event can be an effective way to raise money for a charitable purpose in Michigan. The event might be to support the operating budget of a nonprofit organization or to solicit donations for a member of the community in need. Receiving contributions as part of all charitable events is governed by state law, which has specific requirements regarding registration and the manner in which donations may be requested.
In Michigan, charitable events are subject to the Charitable Organizations and Solicitations Act. The act requires most organizations and professional fundraisers to register with the state Attorney General's office prior to conducting any event that involves the receipt of donations from the public. The process involves filing a registration form along with information about your organization, including a recent financial accounting, corporate bylaws and a copy of your Internal Revenue Service confirmation letter, if you have obtained federal tax exempt status.
Certain organizations are exempt from the registration requirement in Michigan. An exemption applies to an organization that conducts an event for the benefit of an individual, provided it is carried out by volunteers and the funds received are all turned over to that person after deducting reasonable costs for solicitation. An example would be a fundraiser to assist with medical bills for a local sports hero diagnosed with cancer. Organizations are also exempt from the reporting requirement if they receive less than $25,000 in contributions within a 12-month period and all of the workers are volunteers. Other exempt organizations include veterans organizations incorporated under federal law and organizations licensed by the Department of Human Services, which serves children and families.
Additional requirements apply if your event will use the services of a professional fundraiser to run or assist with soliciting donations. A professional fundraiser is a person that serves as a consultant, advises, acts or is otherwise involved in the solicitation process on behalf of your organization. These individuals must be licensed, which is accomplished by filing an application with the Attorney General. They must also post a $10,000 bond.
Michigan law requires that all organizations holding charitable events refrain from providing misinformation about the purpose of the event, name of the organization or how the fund will be used. You also cannot imply that another organization, the government, or person endorses the event without written consent. Organizations are also prohibited from providing or implying beneficial treatment to those who donate, or unfavorable treatment to those that do not donate. You must also comply with any donor specific request to remain anonymous and must not share that person's contact information with any other individuals or organizations.
- State of Michigan Department of Attorney General: Procedures and Requirements: Charitable Solicitations
- Michigan Legislature: Charitable Organizations and Solicitations Act, Section 400.283
- Michigan Legislature: Charitable Organizations and Solicitations Act, Section 400.288
- Michigan Legislature: Charitable Organizations and Solicitations Act, Section 400.272
Wayne Thomas earned his J.D. from Penn State University and has been practicing law since 2008. He has experience writing about environmental topics, music and health, as well as legal issues. Since 2011, Thomas has also served as a contributing editor for the "Vermont Environmental Monitor."