Professional Fundraiser Contract Compliance Check

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

1. States in scope — where the charity is registered and/or solicits
2. Contract documents — executed agreements, amendments, SOWs, exhibits, fee schedules
3. Filing target(s) — annual report/renewal, campaign notice, co-venturer filing
4. Operational artifacts — donation flow diagrams, processor agreements, bank deposit controls (if available)
5. Registration IDs — fundraiser/solicitor/co-venturer and charity registration numbers per state (if known)
6. 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

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:

2. Extract Contract Data

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

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:

4. Produce Outputs

Gap / Issue Log

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:

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.