Assembly Bill (AB) 2221: Supervision of Trustees and Fundraisers for Charitable Purposes Act was signed by Governor Newsom on September 27 and is now law (though it may not be in effect until January 1, 2027 unless otherwise stated). It carries great significance to charitable organizations in large part because of the change to the law regarding whether charities are delinquent or in good standing.

The California Attorney General (AG) website provides: “A charitable organization that is not in good standing with the Registry because of delinquency, suspension, or revocation may not operate or solicit donations in California. (Cal. Code Regs., tit. 11, § 312.)” So, a delinquency potentially has enormous consequences.

Before AB 2221, a charitable organization could become delinquent for, among other things, failing to timely file an initial registration or registration renewal with the AG Registry. One slip-up resulting in a delinquency could technically result in substantial harm to a charity, which would be required to stop fundraising and operating until its status was cured. But the AG could take weeks or even months to cure the delinquent status of a charity even if it received the delinquent filing immediately after the due date.

AB 2221 addresses this issue, providing in pertinent part:

Before a person or entity’s registration becomes delinquent, written notice shall be sent to the registrant indicating the reason or reasons for deficiency. If a filing responsive to the notice is not submitted within 60 days from the date of the notice, or a timely filing remains deficient, a second written notice shall be sent to the registrant indicating the reason or reasons for deficiency. If a filing responsive to the second notice is not submitted within 60 days from the date of the second notice, or a timely filing remains deficient, a third written notice shall be sent to the registrant indicating that the registration has become delinquent.

If the Attorney Generals Registry of Charities and Fundraisers does not process a filing submitted by a person or entity who is not registered or whose registration is expired or delinquent within 15 calendar days from the date of filing, the registration shall be deemed in good standing. If the filing is found deficient, a written notice shall be sent to the registrant indicating the reasons for deficiency. If a filing responsive to the notice is not submitted within 30 days from the date of the notice, the registration shall revert to not being in good standing. If a filing responsive to the notice is submitted within 30 days from the date of the notice, the registration shall remain in good standing. If the timely filing remains deficient, a second written notice shall be sent to the registrant indicating the reasons for deficiency. If a filing responsive to the second notice is not submitted within 30 days from the date of the second notice, or the timely filing remains deficient, a third written notice shall be sent to the registrant indicating that the registration is not in good standing. The process set forth in this subdivision is not applicable to a person or entity that is not in good standing because the person or entity’s registration is suspended, revoked, or the person or entity is subject to a cease and desist order. [This subdivision becomes operative on January 1, 2028.]

CalNonprofits, which championed the bill, provided the following summary in an email blast earlier today:

Key Reforms & Modernization Under AB 2221

✅ Faster Processing and Clear Deadlines: The bill requires the Registry to process new and delinquent filings within 15 calendar days, providing nonprofits with the certainty they need to plan their fundraising and operations. Currently there is no time limit to process filings  and currently reviews on average take 45-90 days.

✅ Protection Against Sudden “Delinquency” Status: It creates a “notice-and-opportunity to correct” framework, giving organizations a four-month window to fix clerical errors or filing issues before their “good standing” on the Registry is impacted.

✅ Ensures the Punishment Fits the Infraction: It refines the definition of “good standing” in statute so that simple clerical issues don’t lead to a catastrophic loss of government funding or the ability to fundraise.

✅ Modernizes the Registry’s System: Streamlines compliance by mandating online filings to eliminate paper backlogs and mail delays. It also requires the Registry to develop new automatic approval features, similar to successful systems used in other states like Colorado and Washington

On that last point, AB 2221 includes the following provision:

By January 1, 2028, the Attorney General’s online filing service and related systems shall also support comprehensive electronic administration, including prompt confirmation and automated processing of filings required by Sections 12585 and 12586.

This will be enormously helpful. once implemented, as the AG Registry currently appears to be heavily backlogged, resulting in substantial delays with processing of registrations and other required filings and requests.

As for other legislation of great importance to the nonprofit sector, it was bad news. Governor Newsom vetoed both Senate Bill (SB) 1246 and SB 336, legislation which had earlier been passed unanimously by both chambers of the California legislature. See Governor Newsom Vetoes Priority Nonprofit Legislation (CalNonprofits).