Understanding California AB488 and How It May Affect Your Nonprofit

A Guide for Charitable Organizations*

If your nonprofit organization or charity is fundraising through GoFundMe, Classy or any other online platform, it’s essential to understand California’s AB 488 law. With the rapid growth of online fundraising, California introduced this law to ensure that donations are handled responsibly and transparently.  Importantly, AB 488 applies to any nonprofit that solicits or receives donations from California-based donors—regardless of where the nonprofit is located. This guide will help you navigate AB 488 so that you can ensure that your nonprofit remains compliant and your fundraising efforts aren’t interrupted. 

*This publication is for general information purposes only and does not constitute legal advice. You should consult your own legal advisor to understand how AB488 may impact your organization.

What is California AB 488?

California AB 488, also known as the Charitable Solicitation Registration Act, is a California law that primarily regulates online charitable fundraising platforms (like GoFundMe and Classy) that facilitate donations to nonprofits.  The law officially took effect on January 1, 2023, but its full implementation was delayed until the final regulations were approved on March 24, 2024. The law is designed to provide oversight, transparency, and accountability for digital philanthropy, ensuring that donations reach the intended causes in an ethical and timely manner.  

The law requires online fundraising platforms to ensure that recipient nonprofits are in good standing with the California Attorney General, Franchise Tax Board, and IRS before allowing them to fundraise. Nonprofits must proactively ensure they maintain their good standing to fundraise in California.  This blog is meant to be a resource to nonprofit leaders navigating this law. 

“Good Standing” Requirements Under AB 488

Under AB 488, nonprofits that receive donations online from California donors are considered to be raising funds under state law, regardless of where they are based.

You can verify your nonprofit’s status by checking the following government databases:

• California Attorney General (AG): Maintains a monthly “May Not Operate List.”
• California Franchise Tax Board (FTB): Publishes a list of revoked exempt organizations.
• IRS: Maintains a Revocation List for nonprofits that have lost their exempt status.

If your nonprofit appears on any one of these lists, it is considered out of good standing and non-compliant with AB 488. 

How to Remain in Good Standing under AB 488 

The key requirement to be in “Good Standing” is to not be on any of the above lists. 

Whether your organization may be required to register for fundraising or other purposes in California is a different question, and is driven by a number of fact-specific issues concerning the degree to which (a) your fundraising targets California or otherwise results in substantial donations received from California, and (b) your organization has any physical presence or other activity in California.  

You should consult with your own legal counsel whether registration may be required in California with one or more of the government agencies outlined below.   

1. California Attorney General’s Registry of Charities and Fundraisers

If your nonprofit actively targets California donors or receives substantial amounts of money from California donors, you may be required to register as described below.  Consult your own legal advisor about whether this applies to your organization. 

• Initial Registration:
  • File Form CT-1 with your Articles of Incorporation, bylaws, and IRS determination letter.
  • More details: https://oag.ca.gov/charities
• Annual Renewal (Form RRF-1):
  • Required for all registered charities.
  • If revenue exceeds $50,000, financial statements or IRS Form 990 may be required.
  • More details: https://oag.ca.gov/charities/renewals
• Fundraising Compliance:
  • If using commercial fundraisers or fundraising counsel, additional reports may be required.
  • More details: https://oag.ca.gov/charities/fundraising

2. California Franchise Tax Board (FTB): State Tax Filings

To maintain tax-exempt status, nonprofits with a physical presence or ongoing operations in California must file tax returns annually with the FTB.  Consult your legal advisor whether this applies to your organization. 

• Annual Filing Requirements:
  • Form 199N – For gross receipts of $50,000 or less.
  • Form 199 – For gross receipts over $50,000.
• Applying for California Tax-Exempt Status:
  • Form 3500 – Standard application for tax-exempt status.
  • Form 3500A – Streamlined version for nonprofits already recognized by the IRS.
• More Information: https://www.ftb.ca.gov/file/business/types/nonprofits

3. IRS: Federal Tax Filings & Tax-Exempt Status

Nonprofits must file annual tax returns with the IRS to maintain their 501(c)(3) status.

• Annual IRS Form 990 Filings:
  • Form 990-N – For gross receipts of $50,000 or less.
  • Form 990-EZ – For gross receipts between $50,000 and $200,000.
  • Form 990 – For gross receipts over $200,000.
• Reinstating Tax-Exempt Status:
  • Check the IRS Revocation List
  • File Form 1023 or Form 1023-EZ for reinstatement.
  • More information: https://www.irs.gov

4. California Secretary of State: Business Filings

Lastly, registered nonprofits with physical operations in California are required to file every two years with the Secretary of State to remain active and maintain good standing status.  Consult your legal advisor whether this applies to your organization

While the Secretary of State (SoS) does not publish a "May Not Operate" list for the purposes of AB 488, failure to maintain good standing with the SoS could still result in your nonprofit being listed on the Attorney General’s (AG) “May Not Operate" list. This could impact your ability to fundraise and receive donations through online fundraising platforms.

Statement of Information (SI-100 or SI-550):

• • • • File every two years.
      • Initial filing due within 90 days of registration.
      • Filing fee: $20.

• Check Registration Status: Use the Bizfile Online portal to confirm your registration is current.
• More Information: https://www.sos.ca.gov/business-programs/business-entities

Best Practices for Staying Compliant

If your organization is required to register with one or more California government offices, the following steps can be helpful in assuring you remain in good standing: 

• Track Filing Deadlines: Mark deadlines for state and federal filings.
• Keep Accurate Records: Maintain copies of all submitted forms and communications.
• Monitor Compliance Status: Regularly checking your standing with the Attorney General, California Franchise Tax Board, and Federal Internal Revenue Services, as applicable.
• Seek Professional Guidance: If you have questions or face compliance issues, consult legal counsel or the California Charities Division.

FAQs About AB 488

Does AB 488 apply to all nonprofits, even those outside of California?

Why is my nonprofit still listed as out of compliance (i.e., on one of the three agency lists) after submitting all required filings?

What happens if my nonprofit is non-compliant with AB 488?

How can my nonprofit ensure compliance when fundraising online?

Where can I learn more about AB488? 

If you have specific questions about how AB 488 applies to your nonprofit, consider reaching out to a professional. Nonprofit attorneys or compliance consultants familiar with fundraising law can give tailored guidance. AB 488 introduces some complex new obligations, so getting expert advice can be worthwhile – especially if your organization is heavily involved in online fundraising.

Stay Compliant and Keep Fundraising

Compliance with AB 488 ensures your nonprofit can continue fundraising without interruption and avoid penalties. By following the steps above and using available resources, your organization can stay in good standing and focus on making a difference.