Part of the Multi-State Fundraising Compliance Series. It is design to provide practical guidance on charitable solicitation registration and multi-state fundraising compliance.
Video Overview:
One of the most common questions nonprofits ask during charitable solicitation registration is: what financial statements are required? While some organizations assume basic financial summaries are sufficient, others worry that audits are required everywhere. In reality, requirements vary by state and often depend on revenue thresholds.
In this video, we break down the different levels of financial documentation required for registration, including IRS Form 990, internal financial statements, CPA reviews, and audited financial statements. We also explain how these requirements change as organizations grow and expand into multiple states.
Understanding these financial requirements helps nonprofits avoid delays, deficiency notices, and unexpected audit obligations—while ensuring their registration filings are complete and compliant.
This video explains what financial statements are required for charitable registration and how requirements change based on revenue and state rules.
This video is part of the Multi-State Fundraising Compliance Series, which explains charitable solicitation registration and nonprofit fundraising compliance requirements across the United States.
Key Topics Covered
- Why financial disclosure is required for registration
- IRS Form 990 as a foundational requirement
- Basic financial statement requirements
- Revenue thresholds and how they affect reporting
- When CPA-reviewed financial statements are required
Who This Video Is For
- Executive directors launching fundraising expansion
- Development teams building online campaigns
- Finance and compliance staff overseeing registrations
- Boards evaluating regulatory risk
- Organizations expanding fundraising beyond their home state
Video Summary
Financial reporting is a central component of charitable solicitation registration. States require financial disclosures to ensure transparency regarding how nonprofits generate and use funds. One of the most common questions organizations ask is what level of financial documentation is required when registering or renewing across multiple states.
At a foundational level, most states require submission of the nonprofit’s most recent IRS Form 990 along with financial information for the most recently completed fiscal year. This provides regulators with insight into revenue sources, expenses, governance, and program activity.
For many smaller nonprofits, basic financial reporting—often supported by Form 990—may be sufficient. However, each state defines reporting thresholds differently. These thresholds are typically based on total gross revenue or contributions and are not standardized across jurisdictions.
As organizations grow, additional financial reporting requirements may apply. Some states require CPA-reviewed financial statements once certain revenue levels are reached. These reviews provide a limited level of assurance regarding the accuracy of financial statements.
At higher revenue thresholds, many states require audited financial statements. Audits involve a more detailed examination of financial records and provide a higher level of assurance. Crossing an audit threshold—especially during periods of rapid growth—can significantly change a nonprofit’s compliance obligations.
Nonprofits often encounter issues when financial documentation is inconsistent or incomplete. Common problems include discrepancies between Form 990 and financial statements, missing schedules, incomplete CPA reports, or submitting draft financials when final versions are required. These issues can lead to delays or deficiency notices from state regulators.
Managing financial reporting becomes more complex for nonprofits registered in multiple states. Different jurisdictions may have different thresholds, documentation requirements, and renewal timelines. As organizations expand, coordinating financial reporting with registration filings becomes essential to maintaining compliance and supporting continued fundraising growth.
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About the Multi-State Fundraising Compliance Series
The Multi-State Fundraising Compliance Series is an educational video series explaining charitable solicitation registration, multi-state fundraising compliance, and related nonprofit regulatory requirements. Each video addresses a specific compliance question commonly faced by nonprofit executives, development teams, and finance leaders.
Full Video Transcript
FAQs: Audit Thresholds
Do all states require audited financial statements?
No. Audits are typically required only when a nonprofit exceeds certain revenue thresholds, which vary by state.
What is the difference between a CPA review and an audit?
A CPA review provides limited assurance about financial accuracy, while an audit provides a higher level of assurance through detailed testing and verification.
Is IRS Form 990 required for registration?
In most cases, yes. States commonly require the most recent Form 990 or equivalent federal filing.
What triggers the requirement for audited financial statements?
Audit requirements are usually triggered when a nonprofit exceeds specific revenue thresholds set by individual states.
Do financial requirements differ by state?
Yes. Each state has its own thresholds, documentation requirements, and reporting standards.
Do small nonprofits need detailed financial statements?
Smaller nonprofits may only need basic financial reporting, but requirements vary by state.
Related Compliance Videos
- What Is Charitable Solicitation Registration?
- Which States Require Charitable Solicitation Registration?
- Charitable Solicitation Registration Explained for Nonprofits
- Do Small Nonprofits Need to Register in Every State?
Related Compliance Resources
- Where Nonprofits Must Register
- Charitable Solicitation Registration Audit Tresholds
- Multi-State Charitable Solicitation Registration Guide
Need Help Evaluating Your Registration Requirements?
If your organization is evaluating fundraising expansion or navigating multi-state registration requirements, you may schedule a consultation to discuss your situation.