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The Difference Between Tax Compliance and Fundraising Compliance

Episode of The Nonprofit Compliance Brief — practical guidance on charitable solicitation compliance.

Episode Summary:

Many nonprofits assume that maintaining IRS tax-exempt status means they are fully compliant, but tax compliance and fundraising compliance operate under separate regulatory systems with different requirements. This episode explains the distinction between federal tax obligations and state charitable solicitation rules, highlighting where organizations commonly confuse the two. The discussion helps nonprofit leaders understand how compliance responsibilities extend beyond IRS filings and why managing both areas is essential as fundraising activities expand.

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Educational podcast for nonprofit leadership and compliance teams covering charitable solicitation registration and multi-state fundraising requirements.

Episode Length: 25 minutes
Release Date: February 26, 2026
Series: The Nonprofit Compliance Brief

New episodes released weekly covering nonprofit compliance and multi-state fundraising.

Key Topics Covered

  • Differences between IRS tax compliance and state fundraising compliance
  • Purpose of IRS Form 990 versus charitable solicitation registrations
  • Federal oversight compared to state charity regulation
  • Common misconceptions about 501(c)(3) status and fundraising authority
  • Multi-state registration requirements tied to solicitation activity
  • Reporting obligations beyond annual tax filings
  • Role of state attorneys general and charity regulators
  • Risks created by focusing only on tax compliance
  • Governance and oversight responsibilities across compliance areas
  • Practical ways nonprofits can coordinate tax and fundraising compliance

Episode Overview

Nonprofits often devote significant attention to tax compliance, viewing IRS filings as the primary measure of regulatory responsibility. This episode explores why that perspective can leave important gaps. While federal tax compliance governs an organization’s tax-exempt status and financial reporting, fundraising compliance is regulated primarily at the state level and focuses on how organizations solicit and manage charitable contributions. These parallel systems serve different purposes and operate independently.

The discussion explains how organizations frequently assume that filing Form 990 or maintaining good standing with the IRS satisfies broader compliance expectations. In reality, state regulators evaluate fundraising activity, donor protections, and solicitation practices separately from federal tax oversight. As nonprofits expand fundraising beyond their home state — particularly through online giving — these distinctions become increasingly important.

Designed for nonprofit executives, finance professionals, and board members, this episode provides a clear framework for understanding how tax and fundraising compliance intersect but do not replace one another. Recognizing the difference allows organizations to build more complete compliance systems and avoid gaps that commonly emerge during growth.

Unsure whether your organization needs to register before fundraising? We help nonprofits evaluate requirements across all states.
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Who Should Listen

  • Executive directors planning fundraising expansion
  • Development and fundraising teams
  • Finance and compliance staff
  • Board members overseeing risk management
  • Organizations launching online donation programs

Related Compliance Resources

Episode Transcript

About The Nonprofit Compliance Brief

The Nonprofit Compliance Brief explores the regulatory and operational realities nonprofits face as fundraising expands across multiple jurisdictions. Each episode explains complex compliance topics in clear, practical terms to help organizations understand requirements before they become problems.

Learn more and browse all episodes on The Nonprofit Compliance Brief Podcast.

About the Host

The podcast is produced by Ironwood Registrations. The firm focuses exclusively on charitable solicitation registration and multi-state compliance management for nonprofit organizations.

Discuss Your Compliance Questions

If your organization is evaluating fundraising expansion or navigating multi-state registration requirements, you may schedule a consultation to discuss your situation.

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