[Korean Nonprofit Fundraising & Donations ③] Already Collecting Donations Without Registration? — The KRW 10 Million Threshold, Unregistered Fundraising, and Split Campaigns

Hello, I’m Jisangjin, a Korean Certified Administrative Agent.

Suppose a nonprofit organization in Korea launches a new project and posts a donation account on its website. It also promotes the project on social media and sends donation requests to existing supporters by text message and email.

At first, the organization does not know how much it will raise.

KRW 3 million comes in.

Then KRW 7 million.

Then KRW 9 million.

One day, the organization checks its account and realizes that KRW 12 million has already been collected.

Only then does someone ask:

Donation collection registration is required from KRW 10 million. We have already collected KRW 12 million. Can we simply register now?

The answer is not as simple as either “yes, just register now” or “it is already too late.”

Once fundraising has already started, the organization needs to reconstruct what actually happened.

It should review how much it originally intended to raise, when it first began asking outsiders for donations, how much was actually collected, whether multiple campaigns were really part of one fundraising plan, and when registration took effect.

In Part ① of this series, I explained why donation collection registration should not be analyzed simply by asking whether the organization has already crossed KRW 10 million.

In Part ②, we looked at Supreme Court Decision 2021Do16765 and why payments from so-called supporting members are not automatically treated as membership fees.

Part ③ addresses the next question:

What should a nonprofit do if it has already started collecting donations?

This series covers the following topics:

1. Donations Over KRW 10 Million? Why You Should Check the Articles of Incorporation Before Registration
2. Are Supporting Member Fees Really Donations? — Five Factors Considered by the Korean Supreme Court in Decision 2021Do16765
3. Already Collecting Donations Without Registration? — The KRW 10 Million Threshold, Unregistered Fundraising, and Split Campaigns (This Article)
4. What If Fundraising Exceeds the Original Target? — When Is Amendment Registration Required?
5. Can Donations Be Used for Personnel and Promotional Expenses? — Fundraising Costs and Use Outside the Registered Purpose
6. Fundraising Is Not Over When Collection Ends — Completion Reports, Use Reports, and Audits

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If Fundraising Has Already Started, Do Not Begin by Looking for the Day the Account Crossed KRW 10 Million

When a nonprofit discovers this issue, the first thing it often checks is its bank account.

When did the balance reach KRW 5 million?

When did it reach KRW 9 million?

On what exact date did it cross KRW 10 million?

Those dates may matter, but they are not enough.

Under Korea’s Act on Collection and Use of Donations and Promotion of Donation Culture, registration is required when a person or organization intends to collect KRW 10 million or more in donations.

The key wording is not simply whether KRW 10 million has already been received.

The question is whether the organization intended to collect KRW 10 million or more.

If fundraising has already begun, it is useful to identify three dates and two amounts.

Three Dates

1. The date the original fundraising plan was created
2. The date the organization first began soliciting donations from outside parties
3. The date donation collection registration took effect

Two Amounts

1. The original fundraising target
2. The amount of donations actually collected

Only after these five points are aligned can the organization begin to understand the legal structure of the fundraising that has already taken place.

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Donation Collection Registration Is Not Limited to Large National Organizations

Donation collection registration is not a procedure used only by major charities.

In practice, hundreds of fundraising registrations are filed in Korea each year, covering projects of very different sizes and purposes.

The important point is not simply how many organizations register.

It is that when a nonprofit publicly solicits donations above the statutory threshold, the fundraising may fall within a regulatory framework that requires advance registration.

A small organization should therefore not assume that the law does not apply simply because its operations are limited in scale.

The first question should be:

What money are we asking for, from whom, and through what method?

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KRW 10 Million Is Not a Threshold You Wait to Cross Before Filing

Suppose a nonprofit plans to raise KRW 30 million for a project supporting vulnerable households.

The board minutes and project budget state that KRW 30 million will be raised externally.

The website publicly displays a fundraising target of KRW 30 million, and the organization begins requesting donations through social media and email.

Only KRW 3 million is collected during the first month.

Can the organization wait until the total actually reaches KRW 10 million before considering registration?

That is not how the registration system is structured.

The law requires a fundraising and use plan containing information such as the fundraising purpose, target amount, region, method, period, custody of the funds, fundraising expenses, and use plan.

In other words, the system is built around the fundraising plan, not around filing a report after the account balance has already crossed a certain amount.

Before fundraising begins, the first question should therefore be:

How much did the organization intend to raise from the beginning?

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Once Fundraising Has Already Occurred, the Amount Actually Collected Also Matters

This is where the analysis becomes more complicated.

The planned amount is important when determining whether advance registration should have been considered.

However, once unregistered fundraising has already occurred, the amount actually collected may also become relevant.

One important case is Supreme Court Decision 2010Do5954, decided September 30, 2010.

The case involved allegations that an environmental organization had collected donations without registration.

Under the law applicable at that time, the Supreme Court examined the amount actually collected during the relevant fundraising period.

The Court also distinguished money received from members from money collected from non-members.

After excluding certain payments from members, the amount collected from non-members did not exceed the relevant statutory threshold for each year, and the acquittal was maintained.

This decision arose under an earlier version of the law and should not be read to mean that an organization may simply wait until the amount actually collected reaches KRW 10 million before considering registration under current law.

The more important lesson is this:

The question of whether registration should have been obtained in advance is different from the question of legal responsibility after fundraising has already taken place.

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The Same KRW 10 Million Figure Can Involve Two Different Questions

For a nonprofit manager, KRW 10 million may look like one number.

Legally, however, two separate questions may be involved.

The first is the question before fundraising begins:

Did the organization intend to collect KRW 10 million or more in donations?

The second is the question after fundraising has already occurred:

How much money that legally qualifies as donations was actually collected, during what period, and under what fundraising plan?

This is why an organization should not conclude that no issue existed merely because actual deposits had not yet reached KRW 10 million.

At the same time, the fact that more than KRW 10 million entered a bank account does not automatically answer every legal question either.

The original plan and the actual fundraising must be reviewed separately.

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Example 1. The Organization Intended to Raise KRW 30 Million from the Beginning

Suppose an incorporated association launches a support project and decides to finance KRW 30 million through outside donations.

The board materials and project plan both show the KRW 30 million target.

The same amount appears on the website.

The organization then posts its donation account on social media and sends sponsorship proposals to companies.

KRW 4 million is collected in the first month.

The total reaches KRW 8 million in the second month.

By the third month, the organization has collected KRW 12 million.

It would be misleading to say that the registration issue began only in the third month when the actual amount crossed KRW 10 million.

If the organization intended from the beginning to raise KRW 30 million, the need for advance registration should have been examined before public solicitation began.

Once three months of fundraising have already passed, the organization must review not only the original target but also the actual amounts collected, the fundraising period, and the legal character of the funds.

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Example 2. The Original Target Was KRW 8 Million, but the Campaign Expanded

The facts may be very different if the organization did not originally plan to raise KRW 10 million or more.

Suppose the original project budget and fundraising target were KRW 8 million.

The campaign performs better than expected, and the nonprofit later expands the project and decides to continue fundraising up to KRW 20 million.

This is not the same factual structure as a campaign that intended to raise KRW 20 million from the beginning.

The organization needs to identify when the fundraising target changed and what solicitation activities continued after that change.

Once fundraising is underway, contemporaneous records become more important than what the current manager remembers or says today.

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Example 3. What If the Organization Raised KRW 6 Million and Then Another KRW 7 Million?

Suppose the same project is funded through two campaigns.

The first campaign raises KRW 6 million.

Several months later, a second campaign raises KRW 7 million.

Each campaign, viewed separately, is below KRW 10 million.

Does that automatically mean they are legally independent?

Not necessarily.

In Supreme Court Decision 2013Do8118, decided January 14, 2016, the Court examined repeated fundraising activities conducted under a single fundraising plan under the law applicable at the time.

Where multiple collections were carried out as part of one plan, the Court considered them together rather than automatically treating each collection as an entirely separate event.

Therefore, simply labeling the campaigns:

Campaign 1 — KRW 6 million

and

Campaign 2 — KRW 7 million

does not necessarily make them legally separate.

The organization needs to ask whether they were connected by the same project, the same fundraising purpose, the same original plan, and substantially continuous solicitation activities.

The key issue is not how many campaign names were used, but whether the fundraising was substantively part of one plan.

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Using a Different Bank Account or Posting a New Campaign Page Does Not Automatically Create a Separate Fundraising Activity

In practice, organizations sometimes assume that fundraising is separate because the bank account changed, a new social media post was uploaded, or a new event was held.

Formal differences alone are not necessarily decisive.

Suppose an organization planned from the beginning to raise KRW 30 million for construction of one facility, but divided its public campaign into a spring campaign and an autumn campaign.

The fact that there were two campaign names does not answer the legal question.

The organization still needs to determine whether the fundraising was substantively continuous under one purpose and one plan.

This is why the principle reflected in Supreme Court Decision 2013Do8118 is important in practice.

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If the Organization Registers Now, Does That Automatically Cover Earlier Fundraising?

This is one of the most important questions for organizations that discover the registration issue late.

Suppose the organization began collecting donations in January.

It discovered the registration issue in March and later obtained registration for a subsequent fundraising period.

Does the later registration automatically cover the money collected before the registered period?

An official statutory interpretation issued by the Ministry of Government Legislation, Interpretation 20-0551 dated December 25, 2020, addressed a similar timing issue.

The interpretation concerned fundraising that began before registration, where the period originally stated in the application differed from the final registered fundraising period.

The Ministry concluded that fundraising conducted outside the period stated in the registration should be separately examined to determine whether it constituted fundraising without registration.

In practical terms, obtaining registration later does not automatically transform an earlier unregistered period into a registered fundraising period.

However, an official statutory interpretation is not identical to a final court judgment and must be read in the context of the law and facts applicable to that interpretation.

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That Does Not Mean Registering Now Has No Value

The fact that later registration does not automatically erase earlier issues does not mean an organization should ignore future compliance.

The key is to separate past fundraising from future fundraising.

For the past period, the organization needs to determine when solicitation began, how much was actually collected, whether any period was outside the registered fundraising period, and what type of money was received.

For future fundraising, the organization needs to determine how the campaign should be structured and registered going forward.

This is why the first step should not always be to rush into completing a registration application.

The organization should first reconstruct the fundraising timeline.

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If Fundraising Has Already Started, Build a Fundraising Timeline First

This is the most important practical step in this article.

If the nonprofit has already received donations, reconstruct the history in the following order.

Step 1. Original Project Plan

Identify the project, the total project budget, and the amount of funding required.

Step 2. Original Fundraising Plan

Determine how much of the project budget the organization intended to raise from outside contributors.

Step 3. First Solicitation

Identify the date the organization first requested donations through its website, social media, email, text messages, corporate sponsorship requests, or other channels.

Step 4. Actual Deposits

Identify when money was received and distinguish membership fees from donations made by outside contributors.

Step 5. Changes to the Plan

Determine whether the fundraising target or project scope changed during the campaign.

Step 6. Registration

If registration was eventually obtained, review not only the filing date but also the fundraising period stated in the registration.

The timeline should ultimately look like this:

Project plan → fundraising plan → first solicitation → actual deposits → plan changes → registration → later fundraising

Once this timeline is reconstructed, it becomes easier to identify which period or amount requires separate analysis.

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Where Can the Original Fundraising Plan Be Found?

A current manager may not remember exactly what happened several years ago.

The organization therefore needs to review the records that existed at the time.

Relevant materials may include:

• Articles of Incorporation
• board or general meeting minutes
• project plans
• budgets
• fundraising proposals
• historical donation pages
• social media fundraising posts
• corporate sponsorship requests
• text messages and email campaigns
• crowdfunding pages
• CMS application records
• donation account notices
• bank statements
• accounting records

The important documents are not those created today.

They are the documents that actually existed when the fundraising occurred.

For example, if a website publicly stated a KRW 50 million fundraising target at the time, preparing a new internal document today that states a different target does not change the historical facts.

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Do Not Rush to Delete or Rewrite Historical Fundraising Materials

When an organization discovers a possible registration problem, its first instinct may be to edit the website or remove old fundraising posts.

That can make later review more difficult.

Historical website pages, social media posts, sponsorship requests, meeting minutes, and bank records may all be relevant when reconstructing the actual fundraising structure.

The organization should therefore preserve the existing materials first and determine what was publicly communicated at the time.

The goal is not to rewrite the past.

It is to reconstruct what actually happened in chronological order.

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If Membership Fees and Donations Were Mixed Together, Do Not Begin with the Total Bank Deposits

Suppose KRW 30 million entered one nonprofit bank account during a year.

Some of that money may have been membership fees paid by actual members under the Articles and membership system.

The rest may have been donations from members of the general public responding to website or social media campaigns.

In that situation, it may be inappropriate to treat the entire KRW 30 million as donation collection without further analysis.

As explained in Part ②, the legal character of the money should be classified first.

For fundraising that has already occurred, the analysis can therefore be organized as follows:

Review Articles and membership relationships → classify funds that qualify as donations → identify solicitation activities → determine the original fundraising target → calculate actual donations collected → determine whether multiple campaigns formed one fundraising plan → separate pre-registration and post-registration periods

If the first classification between membership fees and outside donations is wrong, the calculations and compliance analysis that follow may also change.

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Unregistered Fundraising Can Also Trigger Penalties

Korean donation law contains criminal penalties for fundraising that is conducted without the required registration.

However, the existence of a penalty provision does not mean that every organization that discovers a delayed registration issue should immediately assume that criminal liability has been established.

The organization first needs to determine whether the money qualifies as donations under the Act, whether actual solicitation occurred, whether the fundraising fell within the registration framework, and what amount and period are legally relevant.

The first task should therefore not be to predict punishment.

The first task is to reconstruct the facts accurately.

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What Can a Nonprofit Review Internally?

If fundraising started recently, the original target and project plan are clear, membership fees and outside donations were separated, and the fundraising channels were simple, the organization can begin with an internal review.

Place the project plan, board materials, original website and social media posts, and bank records in chronological order.

Then distinguish membership fees from outside donations and compare the original fundraising target with the amount actually collected.

However, an organization should avoid relying only on its current Articles or bank balance when:

• the original fundraising target is unclear;
• several campaigns were conducted;
• membership fees and outside donations were mixed in the same account;
• fundraising continued for a significant period before registration;
• historical fundraising messages differ from internal plans;
• a substantial amount has already been collected or spent; or
• the organization needs to evaluate whether earlier fundraising was conducted without registration.

In these situations, it may be necessary to review the Articles, project plans, meeting records, historical fundraising messages, membership records, bank transactions, and accounting records together in chronological order.

If a criminal investigation or complaint has already begun, review by a Korean attorney may be necessary.

If the main issue concerns tax-deductible donation receipts or tax treatment, separate tax advice may also be appropriate.

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Remember Three Dates and Two Amounts

A nonprofit that discovers this issue often focuses on one date:

The day the account balance crossed KRW 10 million.

But that date alone is not enough.

The five points to remember are:

Three Dates

1. When the original fundraising plan was created
2. When the organization first solicited donations from outside parties
3. When fundraising registration took effect

Two Amounts

1. The original fundraising target
2. The amount of donations actually collected

Supreme Court Decision 2010Do5954 illustrates why actual fundraising amounts and the legal character of the funds may matter once fundraising has already taken place.

Supreme Court Decision 2013Do8118 illustrates why multiple rounds of collection under one fundraising plan may need to be considered together.

Official Interpretation 20-0551 also shows why fundraising conducted outside the registered period is not automatically regularized merely because registration was obtained later.

So the most useful question is not simply:

When did we cross KRW 10 million?

It is:

How much did we originally intend to raise, when did we first begin soliciting donations, how much did we actually collect, and when did registration take effect?

Only after answering those questions can the organization determine what needs to be addressed now.

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The Next Article: What If Fundraising Exceeds the Original Target?

In Part ④ of this series, we will examine what happens when a fundraising campaign performs better than expected and is likely to exceed the original registered fundraising target.

We will look at when amendment registration should be considered and why waiting until the target has already been exceeded can create a different problem.

If fundraising is already underway, the first step is usually to organize the original project plan, fundraising materials, membership records, and transaction history chronologically before deciding how to proceed.

Whether past fundraising may raise a Korean donation collection registration issue, and how past and future fundraising can be separated in your specific circumstances, can be confirmed through a free preliminary review based on the actual fundraising records and transaction history.