Effective July 1, 2025, a recently enacted Florida law, Senate Bill 700, will broadly prohibit those involved with charitable solicitations or sales promotions from receiving or soliciting funds from individuals and entities associated with certain foreign countries. The law establishes an "Honest Services Registry" that will feature only certain nonprofits that certify that they are not influenced by and do not solicit or receive support from a "foreign source of concern." Charities and other kinds of covered nonprofits and cause marketing programs operating in Florida should consider updating their contribution forms to include donor attestations to screen for possible ties to restricted foreign sources. Nonprofits, professional fundraisers, fundraising consultants, and commercial co-venturers should also review their dealings with foreign individuals and entities to determine if the new reporting requirements or restrictions will apply to them.
Ban on Receiving or Soliciting Contributions from a "Foreign Source of Concern"
The new law prohibits any person from soliciting or accepting contributions or anything of value from individuals and entities designated as "foreign sources of concern" from "foreign countries of concern" in connection with the planning, conduct, or execution of any charitable fundraising or charitable sales promotion. This prohibition extends to charitable organizations (including public charities, private foundations, and social welfare organizations that are tax-exempt under 501(c)(3) and 501(c)(4) of the Internal Revenue Code), professional fundraisers, fundraising consultants, and commercial co-venturers. Multinational companies and foreign covered nonprofits seeking to raise money in Florida for charitable projects or organizations abroad can also be prevented by the restrictions from soliciting the state's residents.
Foreign Sources Defined
The impacted "foreign countries of concern" are the People's Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People's Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, and the Syrian Arab Republic. The restrictions extend to the following sources:
- the government or any official of the government of a foreign country of concern
- a political party or member of a political party or any subdivision of a political party in a foreign country of concern
- a partnership, association, corporation, organization, or other combination of persons organized under any laws of or having its principal place of business in a foreign country of concern, or a subsidiary of such entity
- any person who is domiciled in a foreign country of concern and is not a citizen or lawful permanent resident of the United States
- any agent acting on behalf of the foreign principals described in 1 through 4 above and
- any person, entity, or collection of persons or entities in which any of the foreign principles described in 1-5 above hold a "controlling interest"
The law broadly defines "controlling interest" to mean possession of the power to direct or cause the direction of the management or policies of an entity, whether through ownership of securities, by contract, or otherwise. A person or entity that directly or indirectly has the right to vote 25 percent or more of the voting interests of the company or is entitled to 25 percent or more of its profits is presumed to possess a controlling interest.
Failure to comply with the requirements of the law may expose individuals and entities to civil penalties, as well as a potential ban from raising contributions in or from Florida or conducting charitable sales promotions within the state.
Creation of the Honest Services Registry
The legislation also requires the Florida Department of Agriculture and Consumer Services to establish an "Honest Services Registry" that is accessible on its website, and to adopt rules to implement the registry. The stated purpose of the registry is to help provide Florida residents "with the information necessary to make an informed choice when deciding which charitable organizations to support." To be listed in the registry, an organization must attest that it does not solicit or accept contributions from any foreign source of concern. Although inclusion in the registry is voluntary, the registry may be perceived by donors effectively as a state-approved list of nonprofits worthy of receiving donations.
Registration Attestation Requirements for Election-Related Activities
Federal law currently prohibits foreign nationals from making contributions related to federal, state, or local elections. Buttressing the inability of foreign actors to use nonprofits to influence the political process, the new law introduces a prohibition on nonprofits registering to solicit charitable contributions, or amending or renewing an existing solicitation registration, if they engage in state and local election-related activities and have not registered with the Florida Department of State. To comply, covered nonprofits now must submit attestation statements, signed by an authorized officer, certifying that they are either registered with the Florida Department of State if they are engaged in state and local election-related activities, or that they are not engaged in such activities if prohibited by federal or state law.
The new law further authorizes the Florida Department of Agriculture and Consumer Services to investigate potential violations and refer charities and covered nonprofits, such as social welfare and advocacy organizations, to the Florida Elections Commission for investigation of violations involving state and local election-related activities.
What Should You Do?
Nonprofits operating in Florida should consider updating their contribution forms to include questions and affirmations about foreign ties to minimize risk of compliance enforcement if a contribution from a foreign source is inadvertently received. A voluntary disclosure safe harbor is included in the law for first-time violations if certain conditions are met. These conditions include the nonprofit's receipt of an inaccurate certification from the donor that they do not have prohibited foreign ties, the nonprofit's refund of the contribution to the foreign source within 30 days of notifying the Florida Department of Agriculture and Consumer Services of the restricted contribution, and providing the Department with a plan of action to prevent the future acceptance of contribution from a foreign country or source of concern.
If your organization may potentially have donors, staff, board members, or vendors associated with a country of concern, you should review your transactions with those persons to determine if any reporting requirements or restrictions will apply to you. Nonprofits, professional fundraisers, fundraising consultants, and commercial co-venturers located or operating in Florida or that seek or receive donations from Florida residents can expect increased compliance costs related to the collection, maintenance, and safeguarding of this data. Individuals may likewise be deterred by requests for sensitive personal or affiliation information that will need to be collected for making the requisite certifications.
How Things Might Continue to Change
Florida is not alone in its efforts in monitoring and curbing foreign influence within the United States. The law fits within a broader state-driven trend to impose or consider imposing restrictions and reporting requirements on financial ties with certain foreign countries, including laws that limit foreign beneficial ownership of real estate and prohibit state-funded colleges and universities from accepting grants from individuals and entities associated with certain foreign sources. These states include Florida as well as Alabama, Arkansas, Indiana, Idaho, Iowa, Kansas, Louisiana, Minnesota, Missouri, Mississippi, Montana, Nebraska, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia, and Wisconsin.
Although the enforceability of Florida's 2023 legislation on foreign ownership of real property, Senate Bill 264, is being challenged in the Eleventh Circuit as unconstitutional and preempted by federal law, the decision from the Eleventh Circuit will have far-reaching impacts on the similar extension of restrictions on seeking or receiving foreign support to benefit charities, particularly if challenged under the same precedents.
Finally, Florida's updates to its charitable solicitation law could set a precedent for federal or state efforts to further enhance regulation of nonprofit organizations that are considering restrictions on foreign influence within the U.S. nonprofit sector or grantmaking by U.S. nonprofits to foreign entities.