What is a professional fundraiser bond?
Professional fundraiser bonds (also known as professional solicitor bonds) are legally binding agreements between three parties: individuals or businesses running solicitation and fundraising activities for charities, the government agency responsible for regulating local fundraising activity, and a surety company. The government agency typically responsible for licensing charitable solicitation is the state fundraising counsel, which is overseen by the attorney general.
The government agency is the Obligee and establishes the obligations that the fundraiser (the Principal) must follow. The surety (also called bonding company) issues the bond guaranteeing the performance of the fundraiser.
Why do you need a professional fundraiser bond?
Professional fundraiser bonds are required in some states for eligibility for a license to operate as a professional solicitor or fundraiser for a charitable organization. The bonds protect donors by ensuring that the fundraiser does not fraudulently represent a charitable organization or mislead them as to the actual use of donations during a solicitation campaign. Some states where you need a surety bond include California, Florida, Pennsylvania, and Texas.
When the surety company issues the bond, they provide the government agency a guarantee that the individuals and businesses that donate to a professional fundraiser will receive payment for financial losses resulting from a violation of the statutes and regulations set forth by the fundraiser license.
If the fundraiser fails to meet the obligations set out by the government agency, the surety will pay out any damages up to the bond amount. The fundraiser is ultimately liable for the losses and is legally required to reimburse the surety company for any damages paid under the bond.
How much does a professional fundraiser bond cost?
Professional fundraiser surety bond costs vary depending on the total bond amount and the premium rate. The government agency sets the required bond amount and the surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium.
Premium rates for professional fundraiser bonds typically cost between 1% and 4% of the total bond amount. During the application process, the surety company evaluates your credit score, financial strength, and industry experience. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a professional fundraiser bond. EZ Surety still offers competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for professional fundraiser surety bonds in popular states.
- EZ Surety has issued professional fundraiser bonds in the State of Alabama for premiums as low as $100.
- EZ Surety has issued professional fundraiser bonds in the State of Massachusetts for premiums as low as $250.
- EZ Surety has issued professional fundraiser bonds in the State of Tennessee for premiums as low as $375.