Funding

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What Laws Apply to Fundraising Campaigns?

July 11, 2018 - 3:00 pm
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In recent years, fundraising has exploded thanks to platforms like Crowdrise, GoFundMe, Kickstarter, Indiegogo, Fundly and many others. Pretty much, anybody can start a fundraising campaign for a variety of purposes and causes. With all these fundraising platforms, one must respect and be aware of all the terms and conditions issued. Not doing so can lead to a huge number of fines and other legal problems. While some important factors depend on your fundraising campaign, such as where you live or the amount you garner, there are some basic laws you should be familiar with before you start or begin planning your fundraising campaign.

 

Government regulations

Be sure to understand and follow government regulations. Under any circumstances, you cannot start a fundraising campaign for illicit purposes. Illicit operations include sales of ammunition, guns, drugs, pharmaceutical products, pornography, violent materials, etc. Offering illegitimate investment opportunities or business schemes, such as a get-rich-quick scam, can end your career. The bottom line is that you cannot use a crowdfunding campaign for illegal activities. It’s that simple.

 

Do not infringe copyrights

In regards to all the content you produce for your audience, be sure not to infringe upon any copyright laws. You are responsible to gain permission for the use of any content not deemed to be your own. Be careful of what articles, quotes, images, and music you use during a fundraising campaign to avoid lawsuits or other legal issues.

 

Do not collect crucial personal information

Not all personal data you collect in a fundraiser is equal. If you choose to collect crucial personal information during a fundraiser, your campaign can be cut down in its prime. An individual’s private information is not necessary for a successful fundraiser. If you break this rule, you may have wasted valuable time as your campaign might be stopped.

 

No donations from shady individuals

If you have a real reason to believe that money came from individuals that have troubles with the law, you cannot accept their donations. This also applies to erroneous or fallacious donations. It's highly recommended to get in touch with the owner of the platform if this happens.

 

Do not sell anything

The term “fundraising” does not include the collection of money from people in exchange for goods or services. It would be construed as fraud if no taxes were to be filed for any sales. For fundraising to be legal, people must volunteer to give money out of their own will, with nothing in exchange, but an agreement to follow the rules to make that dream come true. Items may be purchased from your company once it’s established, but by no means during the campaign.

 

Online fundraising

As easy as online fundraising may look at first glance, there are lots you should take into consideration before launching a campaign. Each platform has a “Terms and Conditions” section, which must be reviewed and thoroughly understood. Online fundraising is not regulated by the government, but there are plenty of laws and rules that must be followed. Stay on the safe side by making sure you’re not doing anything that can be construed as illegal.

 

This article was written by Marie Flounoy for Small Business Pulse