Requirements

Npo Compliance Requirements

The compliance requirements for nonprofits (NPOs) in 2025 include a range of new federal, state, and operational obligations, primarily driven by updated federal regulations, IRS rules, financial auditing standards, and data protection mandates[1].

Corporate Transparency Act (CTA) and Beneficial Ownership Reporting

  • Starting January 1, 2025, nonprofits must comply with stricter reporting deadlines under the Corporate Transparency Act (CTA), which requires filing a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN)—even for nonprofits without a 501(c)(3) determination letter[1].
  • Filing deadlines are based on the organization’s formation date. For those formed before January 1, 2024, the deadline is January 1, 2025. Those formed in 2024 have 90 days, and those formed in 2025 have 30 days from incorporation to file[1].
  • Changes in beneficial ownership must be reported within 30 days (reduced from a previous 90-day window). Penalties for non-compliance can be severe, with daily fines[1].
  • Many nonprofits are exempt from BOI reporting, including most 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6), 501(c)(8), 501(c)(10), and 501(c)(19) organizations—but each must confirm their status individually[2].

Federal and State Tax & Reporting Compliance

  • Nonprofits must file the relevant IRS Form 990 annually to maintain federal tax-exempt status and regularly review IRS updates that may affect public support tests and lobbying limits[3].
  • Organizations are required to file state-level tax returns and maintain active franchise, income, sales, and other tax exemption registrations as applicable[4].

Annual Governance, Licensing, and Financial Controls

  • Maintain a registered agent and file annual reports as required by their state[4].
  • Complete and prepare necessary financial statements, establish internal controls, and document adherence to their organization’s conflict-of-interest and whistleblower policies[4].
  • Maintain updated fundraising registrations, ensure all professionals involved are appropriately registered, and have contracts and required documentation on file[4].
  • Conduct regular board meetings, keep accurate minutes, and ensure all bylaws are followed[4].

PCI DSS Compliance for Online Donations

  • Nonprofits accepting credit card donations must comply with PCI DSS (Payment Card Industry Data Security Standard), which is mandatory for safeguarding donor payment information[5].
  • In 2025, nonprofits must prepare for updates with PCI DSS 4.0.1 that take effect March 31, 2025. Even if third-party providers (e.g., PayPal, Stripe) handle payment processing, nonprofits must annually complete the relevant self-assessment questionnaires and vet their platforms for compliance[5].

Audit Requirements

  • Nonprofits expending $1,000,000 or more in federal funds are subject to the federal Single Audit requirements[6].
  • States may have additional audit thresholds, reporting standards, and other requirements. Nonprofits must stay informed about both federal and state-level audit rules and be prepared to engage with external auditors as needed[6].

Other IRS and Governance Essentials

  • Operate solely for approved exempt purposes (e.g., charitable, educational, religious). Avoid providing private benefit to insiders and prohibit partisan political activity[7].
  • Maintain thorough documentation, proper governance protocols, and up-to-date records to retain status and pass audits[7].

Failure to comply with these requirements may result in penalties, loss of tax-exempt status, or reputational harm. Nonprofits are strongly advised to monitor compliance resources closely and consult with professionals to ensure full adherence to all laws and regulations.

References

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