NASCO Issues Annual Report on State Charity Enforcement and Regulation
The National Association of State Charity Officials (NASCO) has issued its Annual Report on State Enforcement and Regulation, which covers the period from September 2024 through September 2025.
Different states have different charitable solicitation requirements, some of which specifically target online fundraising tactics. As a result, charitable organizations must determine the steps they need to take before conducting online fundraising within a particular state to avoid violating state laws. The California Center for Nonprofit Law can help your charity meet state charitable registration requirements nationwide.
The National Association of State Charity Officials (NASCO) is a group of government offices from U.S. states, territories, and commonwealths that oversee charitable assets, organizations, and solicitations. These offices include attorneys general, secretaries of state, and other state agencies responsible for charitable oversight.
NASCO’s annual report contains information on state-by-state activities in the areas of Enforcement (including Solicitations, Governance, Trusts, and Estates and Restricted Charitable Funds), Registration and Registration Enforcement, Transactions and Dissolutions, Outreach (including Guidance and Other Outreach and Training Activities, and Regulations/Legislation.
NASCO Enforcement Actions
Solicitation
The state of Maryland banned three organizations from soliciting in the state, primarily for making false or misleading solicitations and for failing to comply with state charitable registration and solicitation requirements. Minnesota’s Attorney General’s office sued the president of five Minnesota nonprofits with governmental-sounding names for a pattern of deceptive behavior, leading to the dissolution of the organizations and a ban on him leading or incorporating nonprofits in the state.
The Federal Trade Commission, along with various Attorneys General and Secretaries of State, settled a 2024 complaint against the Women’s Cancer Fund, in which the Fund agreed to cease all operations. The Fund collected about $18 million from donors over five years. Although the Fund advised donors that the funds were to be used for the basic needs of women undergoing cancer treatment, only about a penny of every dollar actually paid those expenses, with most funds going to for-profit fundraisers and the Fund’s operator.
Governance
The California Department of Justice filed a complaint for involuntary dissolution of a charitable organization for breach of fiduciary and charitable trust duties. It also reached a settlement with another charitable organization to pay fees, issue grants for charitable purposes from the remaining assets, and dissolve the organization.
The District of Columbia Office of the Attorney General filed an enforcement action against a public school PTA for misappropriation of funds by its treasurer, who must repay the funds and no longer serve on any board. That office also filed an enforcement action against a nonprofit whose executive director diverted over $75,000 of nonprofit funds for personal use and failed to pay an employee; the director was removed from the nonprofit.
Various other state government agencies also filed complaints over the misappropriation of funds held by charitable organizations by their directors and officers. The Minnesota Attorney General’s Office was also particularly active in pursuing charitable organizations for governance violations, conflicts of interest, misuse of charitable assets, and failure to comply with charitable registration laws.
Trusts, Estates, and Restricted Charitable Funds
The California DOJ settled with the former trustee of a trust for $400,000 and a lifetime fiduciary ban for failing to comply with state registration and reporting requirements, to form and fund the trust’s charitable foundation, and to account for trust activity. That agency also negotiated a settlement with the San Francisco Art Institute in bankruptcy proceedings to maintain restrictions on its remaining endowment funds.
The Connecticut Attorney General’s office was also active in several enforcement actions involving a trust, a private foundation, two estates, and a pond preserve. Various other states initiated similar enforcement actions, primarily to maintain restrictions on assets.
Registration and Registration Enforcement
The state of Maryland settled with one charity for failing to complete annual registrations, resulting in a ban on its soliciting in the state. Still, it continued to allow two other charities to solicit in the state despite their longstanding registration violations. The South Carolina Secretary of State’s office reported a record $1,278,173.85 in fine revenue for delinquent charitable filings.
Transactions and Dissolutions
The Charitable Trusts Sector of the California DOJ reviewed about 250 nonprofit transactions over the past year. The California Registry of Charities and Fundraisers also received over 1,990 requests for letters waiving objections to dissolve voluntarily.
Meanwhile, the Office of the Attorney General for DC reviewed a proposed conversion of a healthcare entity involving Providence Hospital, Inc. The OAG allowed the transaction to continue under specific conditions.
NASCO Outreach
Guidance
Four states, including Colorado, Illinois, Indiana, and West Virginia, issued releases warning consumers about charity and disaster scams.
Other Outreach and Training Activities
Various states held conferences, webinars, outreach campaigns, and registration tables for charitable organizations and to address registration requirements.
NASCO Regulations/Legislation
Regulations
The California Attorney General’s Office is engaged in rulemaking regarding the dissolution of nonprofit corporations, the termination of charitable trusts, and the withdrawal of registration for foreign charities operating in the state. Other proposed regulations require online submission of filings, reports, and payments to the Registry of Charities and Fundraisers.
Likewise, the Illinois Attorney General’s Charitable Trust Bureau completed administrative rulemaking to address financial statement requirements under the state’s Solicitation for Charity Act, clarify the process for requesting time extensions, and update registration forms and instructions. Meanwhile, the Maryland Secretary of State proposed regulations concerning late fee waiver and suspension requests.
Legislation
The California legislature amended a probate code section to state that the Attorney General (AG) does not waive the right to object to a proposed settlement adversely impacting a charitable gift by failing to appear at a mediation, mandatory settlement conference, or other court-ordered alternative dispute resolution proceedings. The amended law was in response to a 2021 Court of Appeals decision. Another probate code provision was amended to require trustees holding charitable assets to give notice to the AG before selling or transferring substantially all trust assets.
Other states that enacted related legislation include Connecticut, Florida, Hawaii, Maryland, Massachusetts, Oklahoma, and Oregon.
Frequently Asked Questions (FAQ)
What are the consequences of failing to register for charitable solicitation in a state?
Failure to register can lead to enforcement actions, including fines, bans on soliciting donations, and reputational damage. Some states have imposed significant penalties and even barred organizations from fundraising due to noncompliance. Registration is not just a formality—it’s a legal requirement that protects both donors and charitable organizations.
How can nonprofits ensure compliance when fundraising across multiple states?
Nonprofits should conduct a state-by-state review of solicitation laws before launching any multistate or online fundraising campaign. This review includes understanding registration requirements, disclosure rules, and reporting obligations. Working with legal counsel or a compliance advisor—such as the California Center for Nonprofit Law—can streamline the process and reduce risk.
Why are state attorneys general involved in nonprofit oversight?
State attorneys general play a key role in protecting charitable assets and ensuring that nonprofits operate transparently and lawfully. In other states, secretaries of state or other agencies perform these functions. These agencies investigate fraud, misappropriation of funds, governance failures, and deceptive solicitations. Their oversight helps maintain public trust in the nonprofit sector and ensures that charitable resources are used for their intended purposes.
Ready to Strengthen Your Nonprofit’s Legal Foundation?
Whether you’re launching a new initiative or refining your compliance strategy, having trusted legal guidance is essential. At the California Center for Nonprofit Law, we’re committed to helping your organization thrive while staying aligned with state and federal regulations. Let’s work together to protect your mission and support your growth. Call us at 949-892-1221, email info@NPOlawyers.com, or connect with us online to get started.