Charitable Registration Audit Requirements

Nationwide guide to financial statement requirements for nonprofits registering to solicit
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When submitting annual charitable registration filings, nonprofits must include both their most recent Form 990 and financial statements. In 22 states, an independent CPA must review or audit the statements once the organization reaches the statutory income threshold. Two states, North Carolina and Virginia, do not require audited financial statements, but they will accept audits in lieu of Form 990.

Financial statements are necessary for an organization's ongoing ability to solicit. Additionally, by having the proper statements prepared, organizations (and their leadership) demonstrate their duty of care and help foster a sector of transparency and trust.

Nonprofits should be prepared to meet the requirements of every state where they register to solicit. CPAs play a valuable role, advising organizations and preparing the annual financial statements needed to comply across jurisdictions. Harbor Compliance works closely with nonprofits and their CPAs to ensure registrations are seamlessly filed and approved.

You can view our helpful table of state-specific charitable audit and financial statement requirements. Because these requirements vary greatly and often change, we encourage nonprofits, CPAs, and auditors to bookmark this page.

Key Terms and Definitions

Before we dive in, organizations should become familiar with a few key concepts.

Annual Contributions
This is the organization’s income resulting from individuals, foundations, and corporate contributors. Many states exclude government grants from their financial statement thresholds. Contributions are reported on:
Total Revenue
This is the organization’s income from all sources. Total revenue is reported on:
Audited Financial Statements
A report by an independent auditor, attesting to the fairness of presentation of the financial statements and related disclosures. In most states, audited financial statements must be prepared in accordance with Generally Accepted Accounting Principles (GAAP).
Reviewed Financial Statements
A more limited report made by an independent auditor. The report verifies that there are no material modifications needed for an entity’s financial statements to be in conformity with the application reporting framework. In most states, reviewed financial statements must be prepared in accordance with GAAP.
Compiled Financial Statements
An organization’s financial statements prepared by an accountant or CPA, but which do not have the assurances provided within reviewed or audited financial statements.
Internal Financial Statements
Financial reports from the organization’s own internal financial software or records. These usually consist of a Statement of Financial Position (Balance Sheet) and a Statement of Activities (Income Statement or Profit & Loss).

What Type of Financial Statements Are Required When Registering to Solicit?

Organizations that register in one or more states should expect to submit financial statements that meet the requirements of each. Regardless of the type (audited, reviewed, compiled, or internal), financial statements must be prepared for the same tax year as reported on Form 990.

Most states base their thresholds on either the Annual Contributions or the Total Revenue reported on the organization’s annual IRS Form 990 return. Florida and Illinois also generally consider program service revenue in addition to contributions.

State financial statement thresholds are not based on either of the following:

  • Contributions or income from an individual state.
  • The number of transactions in a particular year.

For example, a new organization receiving a significant contribution from a single donor may still be required to submit audited or reviewed financial statements if the total exceeds the state threshold.

An organization may need a different type of financial statement each year, depending on its annual income and the states where it intends to register. For example, in one year, the group may be able to submit internal financial statements. Following a significant uptick in contributions or overall growth, it may need to submit reviewed or even audited financial statements.

In all cases, proactive planning helps the organization budget for the cost of assurance work and avoids delays in state registrations.

Waivers From State Financial Statement Requirements

Nonprofits frequently inquire whether a state will waive its requirement for audited or reviewed financial statements. This commonly occurs with organizations seeking to register for the first time, but it may also happen as the organization’s annual income passes the threshold required for renewal.

Because financial statement requirements are set by statute, waiver requests are highly conditional, if not outright impermissible.

Registering organizations should not count on a waiver across states and certainly not for multiple years. While an individual state may waive a requirement for extenuating reasons, some states, like New Jersey, do not issue a waiver under any circumstances. And notably, no state will waive the requirement due to the cost of a CPA or auditor engagement.

Instead, organizations should be aware of and, with their CPA, annually plan to meet statutory financial statement requirements before submitting registration materials.

Table: Charitable Registration Audit and Financial Statement Requirements by State

Below is a table of the current financial statement requirements and thresholds for each state.

Disclaimer: These requirements pertain specifically to the act of filing charitable solicitation registration materials. Nonprofits may be required to obtain audited financial statements for other operating purposes and funding conditions. Organizations are encouraged to speak with a CPA or auditor for guidance on their specific requirements.

Alabama

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Alaska

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Audited financials are not required when registering but they may be requested by the state at a later time.

Arizona

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Arkansas

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold
-

Law

Notes

California

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$2,000,000 Total Revenue


Review Threshold
-

Law

Notes

  • Required for RRF-1 renewal filings only.
  • Government grants do not count as gross revenue in this instance. California also requires charities with greater than $2 million in revenue to establish an audit committee.

Colorado

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Connecticut

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold
-

Law

Notes

Delaware

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

District of Columbia

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Florida

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$1,000,000 Annual Contributions


Review Threshold

$500,000 Annual Contributions


Law

Notes

  • Organizations may elect to submit their IRS form 990 instead of an audited or reviewed financial statement.
  • Organizations that do not file a long Form 990 may be required to submit financial information on the Department's form.

Georgia

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$1,000,000 Annual Contributions


Review Threshold

$500,000 Annual Contributions


Law

Notes

Hawaii

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold
-

Law

Notes

Also required to submit if the charity is required pursuant to a government authority or third party

Idaho

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Illinois

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$300,000 Annual Contributions


Review Threshold
-

Law

Notes

  • If the organization uses a professional fundraiser to solicit in Illinois, the audit threshold is lowered to $25,000 in annual contributions.
  • Contributions include gross amounts of cash plus gross sums paid by the public for merchandise, special events, and services.

Indiana

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Iowa

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Kansas

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Annual Contributions


Review Threshold
-

Law

Notes

Kentucky

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Louisiana

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Maine

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Maryland

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$750,000 Annual Contributions


Review Threshold

$300,000 Annual Contributions


Law

Notes

$100,000 annual contribution threshold for private foundations associated with any Maryland state agency

Massachusetts

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold

$200,000 Total Revenue


Law

Notes

Michigan

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$550,000 Annual Contributions


Review Threshold

$300,000 Annual Contributions


Law

Notes

Minnesota

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$750,000 Total Revenue


Review Threshold
-

Law

Notes

Financial statements are required for renewal only.

Mississippi

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Annual Contributions


Review Threshold

$250,000 Annual Contributions


Law

Notes

Missouri

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Montana

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Nebraska

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Nevada

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

New Hampshire

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$1,000,000 Total Revenue


Review Threshold
-

Law

Notes

Organizations with total revenues of $500,000 to $1,000,000 must submit a GAAP financial statement prepared by the organization in-house or prepared by an accountant and reviewed and approved by the organization.

New Jersey

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold
-

Law

Notes

New Mexico

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold
-

Law

Notes

New York

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$1,000,000 Total Revenue


Review Threshold

$250,000 Total Revenue


Law

Notes

Required for CHAR500 renewal filings only. If the organization is registered under 7A and raised less than $25,000 in NYS during a particular tax year, it may not be required to file financial statements of any kind.

North Carolina

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Organizations have the option to submit either Form 990, audited financial statements, or the North Carolina Annual Financial Report Form

North Dakota

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Ohio

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Oklahoma

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Oregon

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Pennsylvania

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$750,000 Annual Contributions


Review Threshold

$250,000 Annual Contributions


Law

Notes

  • Compiled financials are required for charities with at least $100,000 in Gross Annual Contributions.
  • Organizations under $100,000 may be required to file internal financial statements.

Rhode Island

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold
-

Law

Notes

South Carolina

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

South Dakota

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Tennessee

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold
-

Law

Notes

Texas

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

  • Most charitable organizations, with the exception of some veterans and public safety organizations, are exempt from the requirement to register with the State.
  • Organizations are asked to submit financial statements only if they have not filed an IRS Form 990. In such cases audited financials must be included if any have been prepared.

Utah

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Vermont

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

Virginia

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes

  • Organizations have the option to submit either Form 990 or audited financial statements with their annual Form 102 registration materials.
  • If the organization files Form 990-N, it must submit a Certified Treasurer's Report (signed internal statements) from the previous tax year.

Washington

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$3,000,000 Total Revenue averaged over previous 3 years


Review Threshold
-

Law

Notes

  • Washington does not require submission of audited financials with registration or renewal, but audited financials must be made available in paper form to the public upon request or accessible to the public on the internet.
  • Organizations with between $1M and $3M in total revenue averaged over the previous 3 years must make either their IRS Form 990 or audited financials available in paper form to the public upon request or accessible to the public on the internet.

West Virginia

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Total Revenue


Review Threshold

$200,000 Total Revenue


Law

Notes

Wisconsin

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
Yes

Audit Threshold

$500,000 Annual Contributions


Review Threshold

$300,000 Annual Contributions


Law

Notes

Wyoming

More Info
Charitable Solicitation Registration Required?

Financial Statements Required?
No

Audit Threshold
-

Review Threshold
-

Law

Notes
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