South Dakota
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Overall Free to Give Index 7.52/10
Rank 3rd
Category Score (0–10) Rank (50 states)
Overall Free to Give Index 7.52 3rd
Broad Policy Environment 7.89 2nd
Nonprofit Freedom 7.80 11th
Donor Confidence 6.88 9th

Highlights

  • Exceptional overall regulatory environment: South Dakota ranks 3rd overall and 2nd in the Broad Policy Environment, reflecting the fact that the state permits its citizens wide latitude to make their own economic and philanthropic choices.
  • High nonprofit freedom: The state ranks 11th in Nonprofit Freedom, with no registration fees, and moderate reporting obligations for charities and fundraising professionals. It also has no audit requirements.
  • Strong donor privacy and predictable rulemaking: South Dakota offers donor privacy protections, a DAF-friendly environment, and a requirement that new regulations pass the legislature, enhancing long-term stability for nonprofits.
  • No general sales tax exemption: Charities in South Dakota receive no exemption from state sales tax, increasing operating costs relative to states with stronger tax incentives.
  • Limited legal protections for charitable assets: The state offers no donor standing and maintains weak UPMIFA safeguards, providing less robust protection for restricted gifts and endowments.
  • Mandates and protections not as strong as top-tier peers: Despite ranking 9th, states such as Montana and Kentucky offer stronger donor-related safeguards and asset-protection standards, leaving South Dakota room for improvement in this dimension.

Detailed Scorecard

1. Broad Policy Environment

1A. Occupational Freedom (rescaled 0 to 10) 5.50
1B. Tax Competitiveness (rescaled 0 to 10) 10.00
1C. EFNA (0 to 10) 8.18

2. Nonprofit Freedom

2A. Charitable Startup Regulations

Requires charitable registration? Yes
Top Registration Fee $0.00
Minimum Registration Fee $0.00
Top Incorporation Fee $30.00
Minimum Incorporation Fee $30.00

2B. Charitable Reporting Regulations

Requires Annual Report? Yes
Top Annual Fee $10.00
Minimum Annual Fee $10.00
Requires Additional Corporate Filings No
Other Fees $0.00
Tiered Fee Structure No
Overlapping Regulators No

2C. Paid Solicitor Requirements

Commercial Fundraisers Must Register with the State Yes
Paid Solicitor Registration Fee $0.00
Paid Solicitor Renewal Fee $0.00
Surety Bond for Professional Fundraisers $20,000.00
Are Paid Solicitors Required to Report to the State in Order to Start Fundraising? Yes
Fundraising Consultant Registration Required No
Annual Financial Reporting by Commercial Fundraisers Required Yes
Must File Contracts Between Charities and Commercial Fundraisers Yes
Individual Solicitors Employed by Professional Fundraisers Must Register Separately? No

2D. General Audit threshold (revenue)

General Audit threshold (revenue) N/A

3. Donor Confidence

3A. State has Never Introduced Disclosure Yes
3B. State has Privacy Law Yes
3C. State gives Donors Standing No
3D. State has UPMIFA Protections Yes (weak)
3E. Donations are Generally Deductible Yes
3F. General Sales Tax Exemption No
3G. State has Never Proposed DAF Restrictions Yes
3H. New Regulations Require Legislative Approval Yes