After a hacker severely damaged the popular Nonprofit FAQ Web site in the late 1990s, its editor, Putnam Barber, a nonprofit consultant based in Washington state, used what remained of the site to solicit donations for its repair. But he soon received a letter from the attorney general of Minnesota saying that the group was not registered to raise funds in her state. She asked him either to register his nonprofit or to desist from his fundraising.

To comply with state fundraising rules – even...


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