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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 38910
Experience:  Retired (mostly)
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I am starting a for profit venture that includes building a

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I am starting a for profit venture that includes building a website platform that will collect donations on behalf a few charities. Essentially the platform will act as an Agent on behalf of the charity. The company will collect the funds online via credit card and the company will take a small percentage for operating costs and then the remainder will be sent to the charity.

What legal guidelines are there in this scenario? Are there any licenses or permits I have to obtain in order to set this up? I was told that you may need to obtain a license in each state and want to verify if this is true.

Many states require that professional fundraisers register with a State agency (typically the Office of Attorney General). See this link for a discussion about California Commercial Fundraisers (Page 27).

You may be able to avoid any licensing issues, by offering a platform with which charities can raise funds, and instead of taking a cut of the funds, charge a fixed fee for use of the website service. That way, you're not actually fundraising -- you're just offering a marketing platform.

Hope this helps.
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