Professional Fundraiser Contract Compliance Check

Produces a structured compliance audit that classifies each fundraising relationship, verifies registrations, extracts disclosure data, and maps contract clauses against state-mandated requirements.

Prerequisites

States in scope — where the charity is registered and/or solicits
Contract documents — executed agreements, amendments, SOWs, exhibits, fee schedules
Filing target(s) — annual report/renewal, campaign notice, co-venturer filing
Operational artifacts — donation flow diagrams, processor agreements, bank deposit controls (if available)
Registration IDs — fundraiser/solicitor/co-venturer and charity registration numbers per state (if known)
Solicitation start date — needed for Notice of Intent / contract filing deadlines

If inputs are missing, apply defaults: all registered states; annual report/renewal target; highest-risk classification until clarified. Mark gaps in "Open Items / Needed Inputs."

Output Structure

1. Classify Relationship and Verify Registration

| Type | Key Markers | Regulatory Burden | |---|---|---| | Professional Solicitor | Directly solicits donations; may handle funds, donor data, scripts | Highest — registration, contract filing, campaign reporting, point-of-solicitation disclosures | | Fundraising Counsel | Advises/manages campaigns; does NOT solicit or take custody of funds | Moderate — reclassified as solicitor if counsel solicits or takes custody | | Commercial Co-Venturer | Ties purchase/use of goods to charitable benefit ("$1 per sale goes to X") | Advertising disclosures (benefit amount, duration, charity ID) and accounting | | Platform / Processor / Vendor | Donation platform, payment processor, influencer/affiliate | May become solicitor or co-venturer depending on marketing claims and solicitation control |

If classification is ambiguous, treat as highest-risk category until clarified by counsel.

Registration verification — for each vendor × state, extract and verify against state registry:

| Data Point | Verification Source | |---|---| | Legal name, DBA, address | State registry | | Entity type, state of formation | Secretary of State DB | | Registration No. (per state) | State DB (e.g., NY FR-No, CA CT-No) | | Bond posted (if required) | State bond registry | | Charity's own registration | State DB |

2. Extract Contract Data

Complete one row per vendor × campaign × contract/SOW:

| Category | Fields to Extract | |---|---| | Parties | Legal names, addresses, entity types | | Classification | Solicitor / counsel / co-venturer / other | | Campaign | Name/ID, dates, services, whether "solicitation" occurs | | Compensation | Type (%, flat, retainer, per-call, CPM); percentage + base (gross vs. net); minimums/guarantees; expense allocations | | Custody of Funds | Who receives funds first; deposit method; deposit/remittance timing; segregation; deductions before remittance | | Other Terms | Charity name/logo use; donor data ownership; records/inspection rights; script approval; filing responsibilities; cancellation rights; subcontractors |

Funds flow — document for each arrangement: donor payment methods, intake entity, processor merchant of record, deposit account owner/type, deposit and remittance timing, deductions, reconciliation controls.

Funds-flow red flags:

Vendor receives checks payable to vendor (not charity)
Commingled accounts or no segregation of charitable funds
Remittance timing unstated
Charity lacks bank-view or reconciliation rights

3. Mandated-Clause Compliance Audit

Check each contract against this baseline. Verify exact requirements per state statute.

A. Parties, Scope & Campaign

[ ] Charity and vendor identified (legal names, addresses)
[ ] Services defined; whether vendor will solicit contributions
[ ] Campaign(s) and geographic scope specified

B. Compensation

[ ] Compensation stated clearly (%, fees, calculation base)
[ ] "Gross receipts" vs. "net proceeds" defined
[ ] Expenses and cost allocations defined
[ ] Possible to compute % of gross contributions charity retains

C. Custody of Funds

[ ] Who has custody/control at each step
[ ] If vendor receives funds: segregation, deposit/remittance timing stated
[ ] Cash/check handling, endorsements, payable-to instructions addressed
[ ] Refunds/chargebacks and processor fees addressed

D. Term & Cancellation

[ ] Term and renewal provisions clear
[ ] Charity termination rights included
[ ] Statutorily required cancellation right present (commonly 10–15 days) [VERIFY per state]

E. Recordkeeping & Audit

[ ] Vendor must maintain campaign records (commonly 3–7 years)
[ ] Charity access/inspection rights included
[ ] Periodic accountings required (frequency and content defined)
[ ] Written financial report required after campaign end (commonly 90 days) [VERIFY per state]

F. Solicitation Materials & Disclosures

[ ] Charity approval of scripts/materials required before use
[ ] Point-of-solicitation disclosures addressed (solicitor name, charity name, % retained)
[ ] Co-venture ads include: benefit amount/%, duration, charity identity [VERIFY per state]

G. Registration & Filings

[ ] Vendor represents current registration/licensing
[ ] Registration numbers and renewal evidence required
[ ] Responsibility for state filings/notices allocated
[ ] Pre-solicitation filing deadlines referenced (commonly 10–20 days before start)

H. Subcontractors

[ ] Subcontracting requires charity consent
[ ] Subs meet same registration/recordkeeping requirements

I. Data & Privacy

[ ] Donor data ownership and permitted use addressed
[ ] Unauthorized sale/rental of donor lists prohibited
[ ] Security measures and breach notification included

State-specific matrix — populate per state in scope:

| State | Statute [VERIFY] | Cancellation Right | Financial Report Deadline | Required Filings | |---|---|---|---|---| | CA | Bus. & Prof. Code §§ 17510+ | | | CT-1/CT-2 series | | NY | Exec. Law Art. 7-A; 13 NYCRR Part 91 | | | CHAR007 | | FL | Ch. 496, Fla. Stat. | | | | | IL | 225 ILCS 460/ | | | |

4. Produce Outputs

Gap / Issue Log

| Issue ID | Contract / Vendor | Finding | Risk | Recommended Fix | Owner | Deadline | |---|---|---|---|---|---|---|

Disclosure narrative — Professional Solicitor/Fundraiser:

"During [start] to [end], the organization engaged [Vendor] ([address]; reg. no.: [state: ID]) as a [professional solicitor / fundraising counsel] for [campaign]. Compensation: [X% of gross contributions / $X flat fee] plus [expenses]. Gross contributions: $[amount]; fees paid: $[amount]; net to organization: $[amount] ([Y]% of gross). Contributions were [received directly by organization / received by vendor and remitted within [X] days]."

Disclosure narrative — Commercial Co-Venturer:

"During the reporting period, [Company] conducted a commercial co-venture: [promotion], [start] to [end]. Benefit to organization: [$X per sale / X% of sales], subject to [cap/floor]. Total received: $[amount]. Funds transferred [timing/method]. Registration: [state: ID/filing date]."

State reporting data map:

| Item | Extracted Data | Form 990 Sch. G | CA CT-2CF | NY CHAR007 | |---|---|---|---|---| | Solicitor/CCV name | | Part I, Line 2a | Part II, Line 1 | Part B | | Compensation % or amount | | Part I, Line 2c | Part II, Line 3 | Part B | | Gross receipts | | Part I, Line 2b | | Part B | | Net retained by charity | | | | Part B | | Custody of funds (Y/N) | | Part I, Line 2b | | | | Campaign dates | | | | | | Vendor registration no. | | | | |

Evidence binder checklist:

[ ] Executed contract + amendments/SOWs/exhibits
[ ] Vendor registration proof per state
[ ] Charity registration proof per state
[ ] Notice of Intent / contract filing confirmations
[ ] Campaign materials: scripts, mailers, landing pages, disclosures
[ ] Funds flow proof: processor statements, bank deposits, remittance confirmations
[ ] Campaign accounting: gross receipts, expenses, net to charity, refunds
[ ] Vendor's written financial report of campaign
[ ] Internal approvals (board/management)
[ ] Annual report disclosure worksheet tied to source documents

Guidelines

Charitable solicitation regulation is state-based — requirements differ significantly by state and classification. Always verify current statutes; these laws are frequently amended.
If classification is unclear or mixed, default to highest-risk category.
If only a master agreement is available, treat missing SOWs/amendments as compliance risks.
Confirm exact form field names per state (CA RRF-1/CT-2CF, NY CHAR500/CHAR007, Form 990 Schedule G).
Pre-solicitation filing deadlines (Notices of Intent, contract filings) are commonly 10–20 days before campaign start — check per state.
Every classification must be supported by contract language and operational evidence.
Compensation base (gross vs. net) must be clearly identified and consistently applied.
Disclosure narratives must match extracted data and be internally consistent.
Mark all uncertain citations or requirements with [VERIFY].
After delivering the audit, confirm: (1) classification matches the user's understanding of each vendor's role, (2) no additional contracts/amendments are outstanding, (3) whether additional state narratives are needed, (4) whether funds-flow concerns require escalation.
This workflow supports legal and compliance review — it is not legal advice.

Required disclaimer on every output:

THIS COMPLIANCE AUDIT REQUIRES INDEPENDENT ATTORNEY VERIFICATION OF ALL STATUTORY REQUIREMENTS, CLASSIFICATION DETERMINATIONS, AND FILING OBLIGATIONS, AND DOES NOT CONSTITUTE LEGAL ADVICE.