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Do I have to have a 501C3 in order to fundraise?

Ask Me Anything Summary

Every single state requires that you have a 501(c)(3), which is the document that allows you to start your organization.

With a for-profit organization, you might have a Q Corp, an S Corp, an LLC, or a B (Benefit) Corp. But for a nonprofit, you need a 501(c)(3) or 501(c)(6) that identifies that your organization is not in the business of making a profit and distributing it to shareholders. That does not mean your organization can’t have extra money at the end of the year. It means you do not have shareholders to whom you return funds because they have invested in your business. That is the first step.

The second step is to check your state guidelines. That is VERY important because many states, such as Florida, have state solicitations guidelines; and you must have a state solicitation license in order to fundraise. In fact, even if you were to hire someone to fundraise for you, such as Sharity, you still must have that state solicitation license.

Make sure you have all your legal documents in place before you ask for donations on Facebook, or meet with someone one on one. There are many civil and often criminal penalties for fundraising without the appropriate licenses.

If you have a burning question about nonprofits, please reach out to us at Sharity. You can email me at, contact us through the website, or message us through LinkedIn or Facebook. We would love to help you get started and achieve your mission.