John P. McDonough, Secretary of State
Suggestions for Charitable Organizations in the Use of
The Charitable Organizations Division of the Office of the Secretary of State offers the following suggestions to
ensure that your charitable organization is well-informed and able to make wise decisions when
contracting with a professional fund-raiser.
Ask whether the paid fund-raiser is registered with the Charitable Organizations
Division of the Office of the Secretary of State. All fund-raising counsel and professional
solicitors in Maryland must register annually.
Each professional solicitor (an individual who directly solicits or receives contributions
from the public) is required to submit an original $25,000 surety bond or irrevocable letter
of credit to the Charitable Organizations Division. Ask to see a copy of the bond or letter of
credit or contact the Charitable Organizations Division for
Request references. Contact charitable organizations which currently have, or at one time had, fund-raising contracts with the
fund-raiser. Ask if their experience with this fund-raiser was beneficial to their organization.
Examine financial accounting reports that professional solicitors are required to file with the Office
of the Secretary of State.
Insist that the fund-raising contract be in writing. The Maryland
Solicitations Act requires
that contracts be in writing and that certain terms be included in the fund-raising contract.
Account for the possibility that the fund-raising campaign may not be successful.
Determine who pays for the unsuccessful campaign.
In a contract with a fund-raising counsel (an individual who provides fund-raising advice to
a charitable organization but does not solicit or receive charitable solicitations), the contract must
contain the names and addresses of both parties, the services to be provided, the period of the
contract, the method of compensation, and the number of persons to be involved in providing the services.
In a contract with a professional solicitor, the contract must include the names and addresses
of the parties and a clause stating the minimum percentage of the gross receipts of the fund-raising
campaign that will be used exclusively for the charitable organization's purposes. The solicitation
text is required to be attached to the contract.
Clarify that the charitable organization has control over the funds, including those received
after the end of the fund-raising campaign. The professional solicitor should never have the authority
to withdraw funds from the bank account into which the contributions are deposited. The bank account
should be solely in the name of the charitable organization.
Ensure that your charitable organization has the right to prior approval of all materials,
including the solicitation script. The paid solicitor must include in the script, and state during
every telephone call and in every written solicitation, a statement of the name of the charity, the
purpose and that the person soliciting the charitable contribution is a paid fund-raiser and will provide,
on request, a copy of the charitable organization's financial statement.
If possible, visit the telephone room where the charitable solicitations are being made.
Ensure that the callers are strictly following the scripts and complying with the Maryland Solicitations Act.
Require prior approval of any subcontracting of services included in the contract.
Making this a provision in the contract ensures that the charitable organization knows who is
performing the work and provides an opportunity to refuse to subcontract or refuse the subcontractor.
Keep informed either daily or weekly of the charitable contributions received and the bank or
financial records. Be certain that the professional solicitor is aware of your desire to be updated daily
Keep track of the expenses incurred during the charitable solicitation. Make sure that they
are reasonable and justifiable.
A charitable organization is responsible for exercising controls over
the fund-raising activities conducted on its behalf (Maryland Solicitations Act, Title 6 of
the Business Regulations Article of the Annotated Code of Maryland). Since the public's main
contact with a charitable organization is through its fund-raising activities, it is important that a
charity chooses a fund-raiser that is ethical, professional and stays within the boundaries of the
- Contact the Charitable Organizations Division of the Office of the Secretary of
State for assistance or to report problems.
If your charitable organization desires, the staff in the Charitable
Organizations Division will review contracts prior to signing to ensure
compliance with the law.