These materials have been prepared by Evans & Rosen LLP for informational purposes only and do not constitute legal advice, nor are any of these materials intended to be a substitute for obtaining legal advice. You should not rely or act upon any information provided on this website without seeking the advice of an attorney regarding the facts of your specific situation. These materials are general in nature and are intended, but not guaranteed, to be up-to-date. Please click on the Disclaimer below for more information.
Regulation of California Nonprofit Organizations
Nonprofits in California must comply with the applicable filing
and other requirements of four government agencies: the California
Secretary of State, California Attorney General, Internal
Revenue Service, and California Franchise Tax Board (the California
equivalent of the IRS). The oversight functions of these agencies
are described below and the relevant link provided.
• California Secretary of State. The
Secretary of State oversees incorporation, mergers, dissolution,
and other corporate filings. California nonprofit corporations
are required to file Form SI-100 biennially. The Secretary
of State’s website provides both forms and basic information: http://bpd.cdn.sos.ca.gov/corp/pdf/so/corp_so100.pdf.
• California Attorney General. The
Attorney General requires most charities to register and oversees
funds held in charitable trust. All charities registered with
the Attorney General’s Office must renew their registration
annually. The Attorney General publishes a helpful guide for
•Internal Revenue Service. An organization
seeking Internal Revenue Code Section 501(c)(3) status must
file an application for recognition of tax exemption with
the IRS. There are some limited exceptions to the filing requirement
including an exception for churches (which include mosques,
synagogues, zendos, and similar houses of worship) and for
organizations, other than private foundations, with gross
receipts of normally not more than $5,000. There are also
annual filing requirements for most tax-exempt organizations.
The IRS provides helpful information for various types of
tax-exempt organizations on its website, including the Life
Cycle of a Public Charity/Private Foundation: http://www.irs.gov/charities/charitable/article/0,,id=136459,00.html.
• California Franchise Tax Board. To
qualify as tax exempt under California law, nonprofit organizations
must apply for tax exemption with the California Franchise
Tax Board. Unlike federal law, California law requires churches
and small charities to apply for tax-exempt status. There
are also annual filing requirements for most tax-exempt organizations.
To learn more visit: http://www.ftb.ca.gov/forms/misc/927.pdf.
There may also be city and county filing requirements as well
as additional legal requirements depending on the activities
of the nonprofit organization.
Below are definitions of some of the terms of art used in
this website to delineate different types of nonprofits. The
broader, all-inclusive terms are listed first and the more
specific terms listed last.
Nonprofit organization: In general, a nonprofit
organization is one that does not distribute profits to individuals
with control over it, such as directors, officers, trustees,
or members. This term includes not only nonprofit corporations
but also nonprofit associations and trusts. The organization
may or may not be exempt from taxation depending on whether
it has met the requirements of the taxing authority.
Non-governmental organization: Any nonprofit
organization that is independent from the government.
Nonprofit corporation: In California, a nonprofit
corporation is an organization that has filed articles of
incorporation with the Secretary of State as a public benefit
corporation, a religious corporation, or a mutual benefit
corporation. Filing the appropriate articles of incorporation
does not confer or guarantee tax exemption. The corporation
must review the requirements of the state and federal taxing
authorities, and in most cases, apply for recognition of tax
Tax-exempt organization: This is an organization
that is recognized by the Internal Revenue Service as exempt
from taxation. It may also refer to an organization that has
received tax exemption from the analogous state authority,
the Franchise Tax Board in California. It may be organized
as a corporation, trust, or association. There are many different
types of tax-exempt organizations. They are often named after
the Internal Revenue Code Section under which they were granted
exemption, such as Section 501(c)(3), 501(c)(4), etc.
Section 501(c)(3) organization: An organization
that has been granted tax-exempt status by the IRS because
it is organized and operated for the purposes described in
Internal Revenue Code Section 501(c)(3). These are commonly
referred to as charitable organizations.
Public charity: An organization that has
received tax-exempt status from the IRS under Section 501(c)(3)
and is either a statutory public charity, such as a church,
school, or hospital, or has satisfied a public support test, or qualifies as a supporting organization.
Donors who make contributions to public charities receive
the most favorable charitable contribution income tax deduction.
Private foundation: An organization that
has received tax-exempt status from the IRS under Section
501(c)(3) but does not qualify as a public charity, usually
because it is funded by a small number of large donors.
This chart provides a brief overview of some of the ways individuals
or entities can fulfill their charitable goals, either by
giving to an existing organization or starting a new one.
This chart does not address the simplest methods of giving,
such as outright gifts to charities and bequests. It also
does not address all the different types of planned giving
vehicles, such as charitable gift annuities, pooled income
funds, and charitable lead trusts. It merely provides an introduction
to several common options available to individuals or entities
contemplating funding or starting a charitable organization. Click here
to download the pdf of chart.