Small Charity Exemptions Explained

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:

Many small nonprofits assume they don’t need to worry about charitable solicitation registration because their fundraising activity is limited. In some cases, that’s true—many states provide exemptions for organizations that raise only modest amounts each year. But these rules are not consistent across states and often come with specific conditions.

In this video, we explain how small charity exemptions work, including common revenue thresholds, eligibility requirements, and when exemption filings may still be required. We also highlight how these exemptions can change as organizations grow or expand their fundraising activities.

Understanding these rules helps small nonprofits avoid compliance mistakes and plan ahead as their fundraising efforts increase over time.

This video explains how small charity exemptions work and when nonprofits may still need to register.

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.

← View All Compliance Videos

Key Topics Covered

Why small charity exemptions exist
Revenue thresholds for exemption eligibility
Common eligibility requirements (no professional fundraisers, volunteer-based operations)
How exemption rules vary by state
When exemption filings or notices are still 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

Small charity exemptions are designed to reduce the regulatory burden on nonprofits with limited fundraising activity. While charitable solicitation registration laws aim to promote transparency and protect donors, regulators recognize that smaller organizations often operate with fewer administrative resources.

In many states, nonprofits may qualify for exemption if their annual fundraising revenue falls below a specified threshold. These thresholds vary widely across jurisdictions, with some states allowing exemptions for only very small amounts of fundraising and others setting higher limits.

To qualify for a small charity exemption, organizations typically must meet additional conditions. These may include not using professional fundraisers, relying primarily on volunteers, and maintaining relatively simple fundraising operations. The exact criteria differ from state to state, making it important to review requirements carefully.

A common misconception is that exemption means no state filings are required. In reality, many states still require organizations to submit an exemption application or notice. These filings confirm that the organization qualifies for exemption and may need to be renewed periodically.

Multi-state fundraising adds complexity to exemption eligibility. A nonprofit may qualify for a small charity exemption in one state but still be required to register in another. Some states may require full registration regardless of fundraising level, while others may require exemption filings instead of full registration.

Online fundraising further complicates exemption analysis. Even small nonprofits may receive donations from donors in multiple states through websites, email campaigns, or social media. If these activities actively solicit donations across state lines, registration requirements may apply in those jurisdictions regardless of the organization’s size.

As organizations grow, they may exceed exemption thresholds over time. When this happens, nonprofits must transition from exemption status to full registration. Monitoring fundraising totals and reviewing exemption eligibility annually helps ensure compliance as the organization expands its operations and donor base.

Unsure whether your nonprofit needs to register before fundraising in other states?
We help nonprofits evaluate requirements across all states.
Schedule a Compliance Review

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: Small Charity Exemptions Explained

What is a small charity exemption?

A small charity exemption allows nonprofits with limited fundraising revenue to avoid full registration requirements in certain states.

What revenue level qualifies as a “small charity”?

Thresholds vary widely by state, ranging from a few thousand dollars to higher amounts depending on the jurisdiction.

Do small nonprofits still need to file anything if exempt?

Often, yes. Many states require an exemption notice or application even if full registration is not required.

Can a nonprofit be exempt in one state but not another?

Yes. Exemption eligibility must be evaluated separately for each state.

Do small charities need to register if they use professional fundraisers?

In some cases, using professional fundraisers disqualifies an organization from exemption.

What happens if a nonprofit grows beyond exemption thresholds?

The organization may need to transition to full registration in applicable states.

How often should nonprofits review exemption eligibility?

At least annually, especially as fundraising activity changes or grows.

Related Compliance Resources

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.

Schedule a Consultation