If you’re a professional fundraiser or commercial co-venturer soliciting contributions in Alabama, you’re required to obtain and maintain a $10,000 surety bond under Section 13A-9-71 of the Code of Alabama. This bond protects donors and the State against any malfeasance or misfeasance in fundraising activities, ensuring that charitable dollars are used as promised. Below, we break down everything you need to know about these bonds—with a particular focus on the critical September 30 expiration date.
1, Who Needs the Bond?
Any individual or organization that:
- Solicits, collects, or disburses contributions (cash or property) in Alabama on behalf of a charitable organization; or
- Enters into an agreement with a charitable organization as a commercial co-venturer, meaning they receive compensation based on the contributions raised.
If your fundraising activities fall into these categories, you’ll need to file a bond before conducting any solicitation in Alabama.
2. Bond Amount and Statutory Basis
Under Alabama Code § 13A-9-71, the required bond amount is $10,000. The bond must be made payable to the Attorney General of Alabama, “for the use of the State and to any person who may have a cause of action against the obligor” for wrongdoing in the solicitation process.
3. Term and the September 30 Expiration
All Professional Fundraiser Surety Bonds in Alabama run on a calendar-year basis, expiring on September 30 each year. Even bonds issued mid-year must conform to this cycle, with their end date set at September 30 of the current year.
Why September 30?
- It aligns with Alabama’s fiscal and regulatory reporting periods.
- It allows the Attorney General’s Office time to review renewals and ensure compliance before year-end.
Key Takeaway:
Mark your calendar for September 30—if your bond lapses on that date, you’ll be operating illegally and may face:
- Civil penalties
- Suspension of solicitation authority
4. Renewal Process
To avoid a lapse in coverage:
- Start Early. Reach out to your surety provider at least 60 days before September 30.
- Submit Updated Filings. Complete any updated principal information or financial statements required by the Attorney General’s Office.
- Pay the Premium. Premiums usually range from 1%–3% of the bond amount, depending on your creditworthiness and fundraising history.
Once renewed, your new bond will again expire on the following September 30, maintaining the consistent annual cycle.
5. What the Bond Covers
Your surety bond guarantees payment to the State or private donors if:
- You misappropriate funds entrusted to you.
- You engage in fraudulent or deceptive solicitation practices.
- You fail to comply with reporting or registration requirements.
Keep meticulous records, follow best practices in donor communications, and ensure all funds are handled separately from operating accounts.
6. Cost Factors and Underwriting
Surety underwriters evaluate:
- Credit Score: The single biggest factor in setting your premium.
- Experience: Years in business and past claims history.
- Financial Strength: Liquidity and net worth.
Lexington National provides referrals to licensed agents who specialize in these bonds and can help secure competitive rates. If you’re a first-time applicant or have unique underwriting challenges, we’ll connect you with a trusted professional who can guide you through the process.
7. How to Secure Your Bond
While Lexington National Insurance Corporation does not underwrite these bonds directly, we maintain relationships with a nationwide network of licensed surety agents. Simply reach out to us, and we’ll refer you to an agent who can:
- Evaluate your specific needs
- Provide a personalized quote
- Guide you through the application and renewal process
8. Additional Resources
- Alabama Attorney General’s Professional Fundraiser FAQ: www.alabamaag.gov/licensing-registration/professional-fundraiser-or-commercial-co-venturer-and-professional-solicitors
- Alabama Code Section 13A-9-71: Statutory bond requirements and penalties.
Don’t wait until the last minute! Ensure your fundraising activities remain in full compliance by securing or renewing your Alabama Professional Fundraiser Surety Bond well before September 30. Contact Lexington National, and we’ll refer you to a licensed agent who can help you get bonded quickly and cost-effectively.