Expanding your nonprofit’s activities into a new state or region can be a great way to broaden your impact and reach more communities in need. However, before operating in a new state, there are important legal and compliance steps to consider. This guide will help you understand what’s required to expand your nonprofit’s activities beyond its original location.
1. Registering as a Foreign Entity
Even though your nonprofit is recognized as a 501(c)(3) at the federal level, each state has its own regulations for nonprofits operating within its borders. If your nonprofit plans to conduct activities in a new state, you may need to register as a foreign entity (also called a "foreign nonprofit" registration).
What Triggers Foreign Registration?
Your nonprofit may need to register in a new state if it:
Opens a physical office, program site, or facility
Hires employees or independent contractors in that state
Hosts fundraising events or solicits donations regularly from residents
Applies for grants that require state registration
Each state has different rules, so it’s best to check with that state’s Secretary of State office to confirm requirements.
2. Charitable Solicitation Registration
If your nonprofit plans to fundraise in a new state, you may need to register for charitable solicitation in that state.
Many states require registration before soliciting donations, including online fundraising that reaches residents in their jurisdiction.
Some states participate in a multi-state registration process to simplify filing, while others require separate applications.
Failure to register before fundraising can result in fines or loss of the ability to solicit donations in that state.
Check with the Attorney General’s Office or Charitable Solicitations Division in the new state to confirm fundraising rules.
3. State-Specific Tax Exemption & Sales Tax Exemption
Even though your nonprofit may be tax-exempt at the federal level, a new state may require additional filings for state-level tax exemption or sales tax exemption for purchases made in that state.
Some states automatically recognize federal 501(c)(3) status, while others require a separate state exemption application.
If your nonprofit will be making large purchases or selling goods in the new state, a sales tax exemption could save you money.
Visit the state’s Department of Revenue to check tax requirements.
4. Employment Laws & Compliance
If your nonprofit plans to hire employees in a new state, it must comply with that state's:
Payroll tax registration
Unemployment insurance requirements
Workers’ compensation laws
Minimum wage and labor laws
Every state has different employment regulations, so check with the state’s Department of Labor for compliance guidelines.
5. Maintaining Good Standing in Multiple States
Once registered in a new state, your nonprofit may need to:
✔ File annual reports with the Secretary of State
✔ Maintain updated registered agent information
✔ Renew charitable solicitation registrations annually
✔ File required tax forms or exemptions
Keeping track of compliance deadlines in multiple states can be complex, so consider using a compliance calendar or working with a service provider.
Final Thoughts
Yes, your nonprofit can conduct activities in a new state or region, but it must follow state regulations, including:
Registering as a foreign entity (if required)
Securing charitable solicitation approval before fundraising
Applying for state tax exemptions (if needed)
Complying with employment laws if hiring staff
Maintaining annual filings and compliance in each state
By taking the right steps before expanding, your nonprofit can operate legally and effectively while making a greater impact in new communities!
If your nonprofit is expanding and needs assistance with domestication filings, foreign registration, charitable solicitation registration, or other compliance requirements, reach out to Instant Nonprofit’s support team. They can guide you through the filing process and ensure your organization remains in good standing while expanding its impact 🚀