Learn how nonprofit governance and delinquency laws might affect access to the Give Lively platform

On March 26, 2024, the California Attorney General’s Office published finalized rules on how to implement Assembly Bill 488 (AB-488), which established new regulations around the way nonprofits conduct online fundraising. 

The most important issues are the legal requirements imposed on all nonprofits identified as “delinquent” by the California Attorney General’s Office, appearing on the “revocation” list of the California Franchise Tax Board (FTB) or showing an indeterminate tax-exempt status with the Internal Revenue Service (IRS). The new regulations also require a charitable fundraising platform like Give Lively to check data from these agencies on a regular basis and restrict access to its fundraising tools by charities with delinquent, revoked or indeterminate status.

Importantly, California delinquency/revocation may apply to nonprofits based in California as well as all nonprofits headquartered outside the state but required to register in California to solicit charitable donations there.

What does the law require?

AB-488 establishes that delinquent/revoked nonprofits are not eligible to receive donations through any "charitable fundraising platform” or “platform charity" – legal entities like Give Lively and the Give Lively Foundation, respectively. 

For Give Lively, this means that, by California law:

• The fundraising pages of nonprofits with delinquent/revoked/indeterminate status must be disabled and their recurring donations must be paused.
• Nonprofits with delinquent/revoked/indeterminate status that apply to use our services will not be considered until they are back in good standing.
• Funds collected via the Give Lively Foundation (for example, for donations via Charity Navigator’s Giving Basket) destined for nonprofits with delinquent/revoked/indeterminate status may not be disbursed.

How can nonprofits check their own status? 

Nonprofits should visit all three of the following sites to check their status:
* California’s Registry Search Tool – for a detailed view of their status with the state of California
* California Franchise Tax Board Entity Search – to verify their tax-exempt status in California
* Internal Revenue Service Tax Exempt Organization Search – to view any auto-revocation notices about their tax-exempt status with the IRS. 

Most commonly, a charitable organization is listed as “delinquent” by the California Attorney General's Office, has its tax-exempt status revoked by the FTB or has an indeterminate tax-exempt status with the IRS when it misses a deadline to submit timely, complete, required filings and/or fees.

The California Department of Justice has a useful Delinquency Webinar on YouTube that walks through the basics of Attorney General oversight, the consequences of delinquency and basic filing requirements.

What are the remedies if a nonprofit is not in good standing?

Unfortunately, the only remedy is to make direct contact with the California Attorney General’s Delinquency Program, the FTB and/or the IRS, establish the reason(s) for the change of status and react as expeditiously as possible.

Although Give Lively is here to help, we have no influence with the California Attorney General’s Office, the FTB, the IRS or the lists they maintain. To ensure a nonprofit is in good standing, it must reach out to the appropriate government agencies. Sentiments about AB-488 should also be directed to the Attorney General’s Office or the California State Legislature.

Once Give Lively receives confirmation that a nonprofit's status has been regularized, we will reinstate the nonprofit's full use of our platform. Our systems update daily and restrictions are lifted automatically when new delinquency/revocation/status lists are released. However, member nonprofits should contact Give Lively if they find they are "current" with California in the Registry Search Tool, do not appear on the FTB revocation list and have clarity around why they may not appear on IRS tax-exempt organization lists.

What about nonprofits that received a notice of delinquency, but are based in another state and don't raise money in California?

The California data Give Lively pulls comes directly from: (1) a list of delinquent charities maintained by the California Attorney General's Office and (2) “Revoked Exempt Organizations Lists” managed by the FTB. Nonprofits are on one or both of these lists if they received a delinquency/revocation email from us or see a warning in the Nonprofit Admin Portal.

This means that, at some point in time, the nonprofit was registered in California to solicit donations there and that it is presently not in good standing.

To learn more: 

• Use the California Attorney General's Office Registry Search Tool for a detailed explanation of why an organization is marked "delinquent" in its database. 
• Download the FTB’s  “Revoked Exempt Organizations Lists” to search for the nonprofit’s name and understand when its tax-exempt status was revoked.
  

These requirements are applicable to all U.S. nonprofits, not just those headquartered in California. The law requires charitable fundraising platforms like Give Lively, Meta/Facebook, Network for Good and others to pause the fundraising activities of California-delinquent/revoked charities because they do business in California, even if those charities are based elsewhere. 

For next steps, contact the California Attorney General’s Office and/or the FTB, or consult with a legal/tax professional. Sentiments about AB-488 should be directed to the Attorney General’s Office and the California State Legislature.

Why must Give Lively turn off fundraising pages on a given date?

In the event of delinquency

AB-488’s rules allow charitable fundraising platforms to grant a seven-calendar-day grace period to delinquent nonprofits after the charitable fundraising platform learns about the delinquency. The California Attorney General’s Office publishes its delinquency lists twice per month. This determines the date mentioned in the emails we send and warnings that appear in the Nonprofit Admin Portal. Give Lively adheres to the timing statutorily set by the state of California. We did not impose the deadlines and we do not control them.

In the event of California tax-exempt status revocation

There is also a seven-calendar-day grace period for tax-exempt status revocations. This begins as soon as we learn of a revocation. As above, Give Lively sends alert emails and places warnings in the Nonprofit Admin Portal. Keep in mind that the FTB updates its revocation list once a week, so the information available to Give Lively may not be the latest. We are nevertheless reliant on the data published by the agencies.

In the event of an indeterminate IRS tax-exempt status

In this case too there is a seven-calendar-day grace period that begins when we learn a nonprofit has an indeterminate tax-exempt status with the IRS. As above, Give Lively sends alert emails and places warnings in the Nonprofit Admin Portal. Of note, the IRS updates its lists once a month, so the information available to Give Lively may not be the latest. We are nevertheless reliant on the data published by the IRS. Learn more about good standing with the IRS.

Are time extensions possible?

Give Lively has no influence with the California Attorney General’s Office, the FTB or the IRS, and is restricted from taking any action beyond referring nonprofits to them. Unfortunately, along with all other charitable fundraising platforms, we are held to a legal standard that imposes significant penalties if we do not comply with the law. We are unable to make exceptions, but stand ready to assist once a nonprofit's situation has been remedied.

Some nonprofits have worked with California for a while and the delinquency is still not resolved

We understand how frustrating this law is for nonprofits just trying to do good work. However, Give Lively has no influence with the California Attorney General’s Office or the FTB and is restricted from taking any action beyond referring nonprofits to them. To ensure nonprofits return to good standing, they must resolve issues directly with the California Attorney General’s Office and/or the FTB and in accordance with their timetables. 

For next steps, contact the California Attorney General’s Office and/or the FTB, or consult with a legal/tax professional. Sentiments about AB-488 should be directed to the Attorney General’s Office and the California State Legislature. Also check the California Attorney General's Registry Search Tool and the FTB’s Entity Search, which has the most up-to-date status for nonprofits. 

Give Lively member nonprofits should contact Give Lively if they find they are "current" with California in the Registry Search Tool and do not appear on any revocation lists. Otherwise we pull the latest information from California's databases nightly and update accordingly.

What about funds that have already been donated but not disbursed? 

Give Lively member nonprofits receive donations directly through a payment processor, so there aren’t any blocked funds. Once a donation has been made, it is typically automatically disbursed to the nonprofit per the terms of the agreement the nonprofit has with the payment processor.

Donations collected via the Give Lively Foundation (for example, for donations via Charity Navigator’s Giving Basket) will not be disbursed to nonprofits with delinquent/revoked/indeterminate status. They will instead be held by the Give Lively Foundation in accordance with state and federal laws.

What actions does Give Lively take?

Give Lively has established outreach and action protocols to respond to member nonprofits declared delinquent/revoked and those from which the delinquency/revoked label has been removed. 

When we learn a nonprofit is declared delinquent

The California Attorney General’s Office publishes its delinquency lists twice per month and the data we receive sets the date for nonprofit action.

Give Lively automatically and promptly alerts the nonprofit:

• We send an email advising of the delinquency and the deadline for action.
• We place the following warning on the dashboard of the Nonprofit Admin Portal.

If the delinquency is not remedied by the date shown in the warnings:

• We send a followup email notification advising that Give Lively has acted according to California law. 
• We update the warning on the dashboard of its Nonprofit Admin Portal.

• We display the following notice on all of the nonprofit’s Give Lively-powered fundraising pages.

• In the User Portal, we display a "This recurring donation has been paused" notice on Give Lively-managed recurring donations.

When we learn a nonprofit’s tax-exempt status has been revoked by the California FTB

The California FTB updates its revocation list once a week and Give Lively must take prompt action.

Give Lively automatically alerts the nonprofit:

• We send an email advising of the revocation and the deadline for action.
• We place a warning on the dashboard of the Nonprofit Admin Portal.

If the revocation is not remedied by the date shown in the warnings:

• We send an email advising of the revocation and Give Lively’s legally required action. 
• update the warning on the dashboard of its Nonprofit Admin Portal.

• We display the “Donations unavailable” notice (see above) on all of the nonprofit’s Give Lively-powered fundraising pages.‍
• In the User Portal, we display the "This recurring donation has been paused" notice (see above) on Give Lively-managed recurring donations.

When we are unable to determine a nonprofit’s IRS tax-exempt status

The IRS updates its data sources and lists once a month and the date we learn of a change of status starts the clock for nonprofit action.

Give Lively automatically and promptly alerts the nonprofit:

• We send an email advising of the nonprofit’s indeterminate IRS status and the deadline for action.
• We place a warning on the dashboard of the Nonprofit Admin Portal.

If the indeterminate status is not resolved by the date shown in the warnings:

• We send a followup email notification advising that Give Lively has acted according to federal law. 
• We update the warning on the dashboard of its Nonprofit Admin Portal.

• We display the “Donations unavailable” notice (see above) on all of the nonprofit’s Give Lively-powered fundraising pages.
• In the User Portal, we display the "This recurring donation has been paused" notice (see above) on Give Lively-managed recurring donations.  

In the event of multiple issues

The emails, notifications and warnings take account of simultaneous, overlapping issues.

• If a new issue is added to an existing one, then emails and warnings recognize both the existing and the new issues.

• If a subset of one or two issues is resolved, then emails recognize the resolutions, but also include reminders about the unresolved issues, whereas the Nonprofit Admin Portal warnings recognize only unresolved issues.

When we confirm a nonprofit is entirely back in good standing

Give Lively automatically and promptly alerts the nonprofit of the removal of the final delinquency/revoked/indeterminate labels.

• We send an email confirming the return to good standing.
• We remove all warnings and notifications from the Nonprofit Admin Portal, fundraising pages and recurring donations.
• We resume recurring donations.

Resources

Most of the following links are mentioned in context above, but lifted out here again for easy reference.

General California resources

• California Assembly Bill 488
• California Attorney General’s Office website (section about charities)
• California Attorney General’s Guide for Charities (best practices for nonprofits that operate or fundraise in California) and a webinar about it 
• California Nonprofit Compliance Checklist

California delinquency resources

• California Delinquency FAQ and webinar 
• California Attorney General’s Delinquency Program

General IRS resources

• Exempt Organizations Business Master File
• Publication 78
• Automatic revocation of exemption list

Nonprofit status checks

• California Registry Search Tool
• California Franchise Tax Board‍
• Internal Revenue Service (IRS)

Government agency nonprofit lists

• The California Attorney General's office updates an official delinquency list twice a month, on the first and third Wednesday of each month. To see this, go to the Attorney General of California Verification Search, open the “Charity Registration Reports” section and carefully read the instructions, advice and chart showing different status types. For delinquencies, download the "May Not Operate or Solicit for Charitable Purposes” list.
• California’s Franchise Tax Board updates its official “Revoked Exempt Organizations List” once a week. To download, visit the Revoked exempt organizations list page and select the appropriate list. The date in the “Revocation Status DT” column is when the revocation officially began.
• Give Lively relies on multiple sources of IRS data to identify organization's good standing, i.e. whether its federal tax exemption is clearly in good order. However, Give Lively is unable to conclusively affirm a nonprofit’s standing if the nonprofit is NOT listed on the IRS Business Master File, IRS Publication 78 or both. Nonprofits can check their own status in these databases.