Registration and Reporting with the California Attorney General's Registry of Charitable Trusts

Nonprofits play a vital role in our communities, and maintaining public trust is crucial to their success. A key component of this trust is transparency, which is achieved in part through mandatory reporting requirements. You might wonder why these reports are necessary. Unlike for-profit corporations with stockholders, nonprofits are accountable to the public. These reports provide oversight, ensuring that charitable assets are used appropriately and in line with the organization’s mission. The Attorney General’s office plays a critical role in representing the public’s interest and uses these reports to oversee nonprofit activities.

This post outlines the essential reporting requirements for nonprofits, helping you stay compliant and avoid potential penalties.

Initial Registration: The First Step

Unless exempt, every nonprofit must file an Initial Registration Form (Form CT-1) with the Attorney General’s Registry of Charities and Fundraisers. This form is due within 30 days of receiving donations (not the date of solicitation), and currently carries a $50 registration fee. This initial step establishes your organization’s presence and begins the process of public accountability.

Ongoing Reporting: Annual Requirements

After registering, nonprofits must submit annual reports. These reports are due 4 months and 15 days after the close of your fiscal year. For organizations with a December 31 fiscal year-end, the deadline is April 15. Two reports are required:

1. Attorney General’s Annual Registration Renewal Fee Report (Form RRF-1): This form updates your organization’s information and ensures your registration remains current.
2. Tax Filing: The specific tax filing required depends on your organization’s annual revenue. 

The filing fee for these annual reports ranges from $25 to over $1000, depending on your organization’s budget.

Exemptions: Who is Not Required to File?

While small nonprofits are not exempt, several other categories of organizations are typically exempt from these reporting requirements. These include:

• Government agencies
• Religious organizations
• Educational institutions
• Hospitals
• Certain cemetery corporations
• Political committees
• Certain health care service plans

Important Note: It is crucial to verify that your organization truly qualifies for an exemption before assuming you are not required to file. Misclassifying your organization can lead to serious consequences.

Consequences of Non-Compliance: Penalties and Repercussions

Failing to register or submit required reports can have significant repercussions. These can include:

• Revocation of Franchise Tax Exemption: This results in a minimum annual tax of $800.
• Late Fees: These accrue for each missed deadline.
• Personal Liability: In some cases, directors and officers can be held personally responsible for the payment of all fees and penalties.

What to Do If You Haven’t Filed or Are Facing Penalties

If you haven’t filed the required reports or are facing penalties, don’t panic. There are often options available, and seeking professional assistance is highly recommended. Exemptions can sometimes be reinstated, and other solutions may be possible.

Proactive Approach: If you are required to register and haven’t yet received a warning letter, it’s crucial to act immediately. Filing as soon as possible can help you avoid potential penalties and demonstrate your commitment to transparency and compliance.

We can help you navigate these complex requirements and ensure your organization remains in good standing. Contact us today for a consultation.