California amends its online fundraising platform law to give charities notice before they lose good standing
Assembly Bill 2221, approved Sept. 27, drops IRS revocation from the good standing test, requires notices before a registration turns delinquent and lets platforms hold gifts under $10 for up to 12 months.
Sacramento. Charities in California will no longer lose access to online giving platforms over an IRS revocation alone, and must be warned in writing before their registration turns delinquent, under amendments to the state's charitable fundraising platform law. The governor approved Assembly Bill 2221 on Sept. 27; it was chaptered that day as Chapter 590 of the Statutes of 2026.
The bill, by Assemblymember Jacqui Irwin, a Democrat from Thousand Oaks, amends AB 488, her 2021 law that put charitable fundraising platforms under the attorney general's supervision and lets them pass on gifts only to charities in good standing. CalNonprofits sponsored it, and it passed both houses without a vote against.
Good standing
Under AB 488, good standing meant that neither the IRS nor the Franchise Tax Board had revoked a charity's tax exemption and that the attorney general had not barred it, according to the Senate floor analysis. The new law drops the IRS from that test; a Franchise Tax Board revocation still counts. A suspension, a revocation or a cease and desist order must now be preceded by an administrative action.
A registration can become delinquent over late reports or unpaid late fees. Before it does, the registry must send a written notice of the deficiency, and a second if nothing responsive arrives within 60 days. Only a third notice, after another 60 days, declares it delinquent.
From Jan. 1, 2028, a new, expired or delinquent registrant whose filing the registry has not processed within 15 calendar days is deemed in good standing; if the filing proves deficient, it has 30 days to answer each of up to three notices.
Small gifts
Platforms must now tell givers what happens to money a charity cannot receive: it may go to an alternate charity, and on those platforms gifts of $10 or less may be refunded. A platform asking shoppers at checkout for $10 or less may put most disclosures behind a conspicuous link, but only for consenting charities.
The text gives most of the changes no date of their own. The Franchise Tax Board, analyzing an April draft, read the end of the IRS check as taking effect Jan. 1, 2027.
The text sets no date of its own for most of the changes. The Franchise Tax Board, analyzing an April draft, read the end of the IRS check as taking effect Jan. 1, 2027.
“Under the current approach, nonprofits are trapped in a cycle of months-long delays associated with simple ministerial paperwork.”
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