New Regulation Overview:
As of March 26, 2024, all fundraising platforms working with charitable contributions on behalf of others must register and submit reports to the California Office of the Attorney General. This includes popular platforms such as Benevity, GoFundMe, PayPal, and Amazon. The regulation applies to websites, mobile apps, and other donation activities like round-ups at checkouts.
Key Points of the Regulation:
- Platforms can only support charities that are in good standing. Important note: This includes organizations that are delinquent, but not fully revoked.
Who is Affected by These Regulations?
- Nonprofits required to register in California, including those that have not done so (delinquent or revoked status).
- Nonprofits in California and other nonprofits outside of California, especially those with situations listed below:
- Foreign charitable organizations (i.e., corporations formed under the laws of other states) that do business or hold property in California for charitable purposes. (“California Laws: Registry of Charitable Trusts”)
Examples of Doing Business in California (per the CA Attorney General):
- Actively soliciting donations targeting California residents.
- Holding board of directors or corporate members’ meetings in California.
- Maintaining an office in California.
- Having officers or employees performing work in California.
- Conducting charitable programs in California.
Steps to Ensure Compliance:
- Check Your Status: you can verify your status on these websites:
- CA Attorney General: CA DOJ OAG Registry Search Tool
- IRS: Tax Exempt Organization Search | Internal Revenue Service (irs.gov)
- CA Franchise Tax Board: Self Serve Entity Status Letter | California Franchise Tax Board
- CA Secretary of State: Search | California Secretary of State
- Achieve Good Standing: If not in good standing, a nonprofit will need to comply immediately to avoid fundraising consequences.
- Consult Professionals: Reach out to a CPA, tax advisor, or attorney as appropriate, as this may affect many nonprofits.
How Is YPTC Helping Clients Through This Change?
- We Are Alerting Clients to Potential Issues: We are notifying our clients about the new regulations and how they may be affected.
- We Are Helping Clients Check Their Compliance: Our staff are assisting clients in gathering the necessary financial information required to stay compliant, such as documentation needed to file the annual Form 990.
Additional Resources:
- Sample of PL-1, Initial Registration for Charitable Fundraising Platforms
- Full text of AB488
- CA Government Code Title 2 Div. 3 Part 2, Article 7 (Section 12581-12599 as amended by AB488)
By staying informed and proactive, we can help you remain compliant and continue your charitable activities without interruption. Not a YPTC client? Contact us to get started.