Fundraising Legally in California: Key Regulations for Nonprofit Organizations

April 3, 2025

Fundraising Legally in California: Key Regulations for Nonprofit Organizations

Nonprofit organizations play a vital role in serving the public interest, but in California, they must navigate specific regulations to fundraise legally. Understanding and complying with these laws is essential to avoid penalties and protect the organization's reputation. At Daryl Reese Law Group, we offer experienced legal guidance to help nonprofits confidently operate within California’s fundraising regulations.


Understanding California's Fundraising Laws


California has stringent rules for nonprofit fundraising, primarily overseen by the Attorney General’s Registry of Charitable Trusts. Nonprofits that solicit funds must register annually with the state, ensuring transparency and accountability.


Registration Requirements


Before engaging in fundraising activities, nonprofits must file an initial registration with the Attorney General's office, providing essential information about their mission, leadership, financial statements, and intended fundraising methods. Annual renewal is required to maintain compliance.


Disclosure and Transparency


California law mandates nonprofits clearly disclose key information to potential donors. This includes the organization's name, address, charitable purpose, and, if applicable, the percentage of funds that go directly to charitable activities versus administrative costs.


Professional Fundraisers


If a nonprofit hires professional fundraising consultants or commercial fundraisers, additional requirements apply. These professionals must also register with the state, and specific disclosures regarding compensation and how funds are used must be clearly provided to donors.


Fundraising Events and Raffles


Special events like raffles or bingo nights have their own regulatory frameworks. Nonprofits holding raffles must register with the Attorney General and follow strict guidelines to ensure compliance. Failing to adhere to these laws can result in penalties and even suspension of fundraising privileges.


Online Fundraising


Digital fundraising, including crowdfunding, is subject to the same transparency and disclosure requirements as traditional fundraising methods. Nonprofits must ensure their online solicitations clearly communicate their charitable mission and financial details to comply with state regulations.


Penalties for Non-Compliance


Failing to adhere to California’s fundraising regulations can lead to severe consequences, including fines, revocation of nonprofit status, and reputational harm. Staying proactive and knowledgeable about legal obligations is crucial for nonprofit leaders.


How Daryl Reese Law Group Can Help


At Daryl Reese Law Group, we understand the complexities nonprofit organizations face in California. Our firm provides thorough legal assistance to help nonprofits comply with all state fundraising regulations. From initial registration to ongoing compliance reviews, we ensure your organization is legally protected and free to focus on your vital charitable work.

Scales of justice on a wooden table with a gavel, near a window.

How to Legally Remove a Business Partner in California

October 8, 2025
Learn how to legally remove a business partner in California. Daryl Reese Law Group helps California business owners handle partnership disputes, buyouts, and legal removals with confidence and compliance.
Woman's hand with pink nails signing a document with a fountain pen, next to

What Constitutes Breach of Contract in California?

September 29, 2025
Learn what constitutes breach of contract in California, including types of breaches, legal remedies, and how to protect your rights. Daryl Reese Law Group assists Californians with contract disputes.v
Scales of justice and gavel on a wooden table, near a window.

Understanding California’s Non-Compete Agreements: What Employers and Employees Need to Know

August 19, 2025
Learn how California law treats non-compete agreements. Daryl Reese Law Group explains what employers and employees need to know about enforceability, exceptions, and legal protections.
A person is signing a document with a pen.

Why an Attorney Should Review Every Contract Before You Sign It

July 22, 2025
Before signing any contract in California, have a lawyer review it. Daryl Reese Law Group can help protect your rights and prevent costly legal issues.
A scale of justice is sitting on a wooden table next to a gavel.

The IRS Form 1023 Deep Dive: Avoiding Common Pitfalls in Your Application

June 18, 2025
Avoid common mistakes when filing IRS Form 1023 for 501(c)(3) status. Daryl Reese Law Group helps California nonprofits submit accurate, complete applications for tax-exempt recognition.
A stack of papers tied together with a string on a table.

Does Your Nonprofit Qualify for 501(c)(3) Status? Key Eligibility Criteria Explained

May 13, 2025
Learn the key requirements to qualify your nonprofit for 501(c)(3) tax-exempt status. Daryl Reese Law Group assists California nonprofits with formation and IRS filings.
A large empty office with lots of windows and tables and chairs.

California Business Dissolution: Key Steps to Close Your Business Legally and Efficiently

April 3, 2025
Learn the key steps to legally and efficiently dissolve your business in California. From filing dissolution paperwork and settling debts to distributing assets, Daryl Reese Law Group provides comprehensive legal guidance to simplify the closure of your business.
A man and a woman are shaking hands in an office.

Legal Pitfalls Nonprofits Face in California and How to Avoid Them

April 3, 2025
Discover the common legal issues California nonprofits face and learn how to avoid them with expert guidance. Daryl Reese Law Group offers comprehensive legal support to keep your nonprofit compliant and protected.

Starting a Nonprofit? Why Fiscal Sponsorship Could Be Your Best First Move in California

January 2, 2025
Embarking on the journey to start a nonprofit organization is both exhilarating and challenging. The prospect of making a meaningful impact in your community and beyond is inspiring, but navigating the legal and financial landscape can be daunting, especially for new organizations. If you're based in California, you have various options to consider when establishing your nonprofit, one of which is fiscal sponsorship. This often-overlooked strategy can provide significant advantages as you launch into the world of charitable efforts. In this blog post, we'll explore what fiscal sponsorship entails and why it might be the best first move for your budding nonprofit in California. Fiscal Sponsorship Fiscal sponsorship is an arrangement where an existing 501(c)(3) nonprofit offers its legal and tax-exempt status to a project or group that does not yet have its own tax-exempt designation. This partnership allows the sponsored entity to accept charitable contributions under the sponsor's umbrella, providing access to funding opportunities that would otherwise require IRS approval — a process that can take several months or even years. For many new nonprofits in California, this can mean the difference between launching immediately or being bogged down by bureaucratic red tape. Administrative Support One of the primary benefits of fiscal sponsorship is administrative support. Starting a nonprofit involves extensive paperwork and compliance with state and federal regulations. A fiscal sponsor typically handles these back-office tasks, including bookkeeping, tax filings, and legal compliance. This administrative assistance allows you to focus on your mission rather than getting lost in logistical details. For those unfamiliar with nonprofit administration or who wish to devote their energy solely to programmatic efforts, this support can be invaluable. Enhanced Credibility Partnering with a reputable fiscal sponsor can enhance credibility with donors and grant-making organizations. Many funders are wary of supporting newly formed nonprofits due to concerns about sustainability and effective management practices. However, being associated with an established entity through fiscal sponsorship can alleviate these concerns by demonstrating oversight from experienced professionals who ensure funds are used appropriately according to donor intent. Mentorship In addition to fundraising advantages, fiscal sponsors often provide mentorship opportunities within their networks. They offer guidance on best practices for building organizational capacity and achieving long-term sustainability—knowledge that could take years to acquire independently. Engaging with seasoned professionals who have been through similar challenges enables aspiring nonprofits like yours to thrive amidst California’s competitive philanthropic environment. Compatibility Check However beneficial it may seem; not every project is suited for every fiscal sponsor arrangement – compatibility matters. Some sponsorship programs only support certain types of projects, so it's crucial to research and reach out to potential sponsors whose missions align with yours. It's also essential to consider the level of involvement and oversight you desire from a sponsor; some operate more hands-on than others. Fiscal sponsorship is a tool for emerging nonprofits in California, offering a streamlined path to operation, funding, and growth that might otherwise be inaccessible due to the complexities of establishing a 501(c)(3) status. By leveraging the resources, credibility, and support of an established sponsor, your nonprofit can focus on achieving its mission from the outset. While it's vital to assess compatibility and align missions with potential sponsors, the benefits of administrative support, enhanced donor confidence, and access to experienced mentorship can provide a foundation for your organization's future success.

Legal Pitfalls to Avoid When Selling Your California Business

December 5, 2024
Selling a business in California can be both an exhilarating and daunting experience. The Golden State, known for its dynamic economy and entrepreneurial spirit, offers numerous opportunities for business owners looking to cash in on their hard work and investment. However, navigating the legal landscape during the sale process is crucial to avoid common pitfalls that could potentially derail the transaction or result in unforeseen liabilities. Whether you're planning your exit strategy or have already found a potential buyer, understanding these legal complexities is vital. At Daryl Reese Law Group, we recognize the importance of a smooth transition and are committed to guiding you through this intricate process efficiently. Accurate Financial Records First, ensure that all your financial records are accurate and up-to-date. Buyers will scrutinize your financial statements as part of their due diligence process, so it's essential to present a clear picture of your company's financial health. Any discrepancies or inaccuracies could lead to mistrust or even legal disputes down the line. Hiring a professional accountant or financial advisor with expertise in business sales can help you organize financials properly, identify any red flags early on, and ensure transparency with potential buyers. Assessment of Existing Contracts Another major pitfall involves not conducting a thorough assessment of existing contracts and agreements. As a California business owner, you likely have various contracts with suppliers, clients, employees, and other stakeholders. It's critical to review these agreements carefully before initiating a sale to ensure there are no clauses that could complicate the transaction. For instance, some contracts may contain change-of-control provisions that require consent from other parties when ownership changes hands. Failing to address these provisions ahead of time can delay or even jeopardize the deal. Ownership of IP Intellectual property (IP) is another area where sellers often encounter challenges. If your business relies heavily on proprietary technology, trademarks, copyrights, or patents, it's essential to secure proper documentation proving ownership rights before entering negotiations with buyers. Overlooking this aspect can lead to costly litigation if disputes arise over IP ownership post-sale. Moreover, accurately valuing IP assets is crucial for setting realistic expectations about your company's worth during price negotiations. Tax Considerations Tax considerations also play an integral role when selling your California business. The state’s tax laws can be complex and affect both parties involved in the transaction significantly—particularly regarding capital gains taxes on profits from the sale. Engaging with tax professionals who specialize in mergers and acquisitions will help you understand how different deal structures impact taxation outcomes so you can make informed decisions while maximizing post-sale proceeds. Selling your business in California requires careful attention to a myriad of legal details to ensure a successful and seamless transition. By addressing financial accuracy, reviewing contracts and agreements, safeguarding intellectual property rights, understanding tax implications, and complying with employment laws, you can mitigate risks and avoid common pitfalls that could jeopardize the sale. Partnering with experienced legal and financial advisors is invaluable in navigating these complexities, offering expertise that paves the way for a smooth transaction. At Daryl Reese Law Group, our commitment is to support you every step of the way, ensuring that you can confidently move forward with your future endeavors, armed with the assurance that your business sale is handled with the utmost care and professionalism.