How to Stop the California ‘Good Standing’ Requirement from Blocking Your Donations
Here at Heller Consulting, we know that donations are vital to your nonprofit’s ongoing work. That’s why we want to make sure you are aware of a State of California “good standing” requirement that could impact your organization’s ability to receive online donations from your California constituents. It applies to organizations soliciting or receiving donations from California, even if they aren’t based in that state.
What is the California ‘good standing’ requirement?
The “good standing” requirement is part of the California Assembly Bill 488 from the State of California, which went into effect on January 1, 2023, and was later amended on March 26, 2024. A provision in the law prevents charitable fundraising platforms from facilitating donations from California residents to any organization not considered in good standing in California, and this summer saw fundraising platforms coming into compliance with this law. In doing so, they may not be processing donations originating in California for organizations not in good standing in that state.
You can find more details about this regulation in the article California Amends Digital Fundraising Regulation.
How to comply with California’s ‘good standing’ requirement
While we are not providing you with legal advice, we do want to make sure you are aware of the “good standing” requirement and provide you with these general tips and resources to help your organization avoid being blocked from receiving donations through your online fundraising platforms:
- Work with your nonprofit’s legal and compliance advisors to ensure your organization stays in “good standing” as part of the California Assembly Bill 488. Monitor the following lists to help determine if your organization remains in “good standing” in the State of California for the purposes of the California Assembly Bill 488:
- Set up reports in your organization’s online fundraising platforms to help you regularly track and watch for failed donations from residents of the state of California. Failed donations could indicate that your nonprofit is not in “good standing”.
- If you find that your organization is not in “good standing,” consider configuring your nonprofit’s online fundraising platforms to prevent solicitations to California donors while you are not in “good standing” and avoid a frustrating donor experience
Set up your online fundraising platforms to help ensure compliance
Although we at Heller Consulting do not provide legal advice or help to monitor if organizations are in compliance with laws and regulations, we wanted to highlight this information that potentially impacts your ability to raise funds and achieve your mission. We can also assist if your organization would like to set up reporting and segmentation in your online fundraising platforms to monitor for unexpected issues.
Contact us today to learn more and get started.
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