Nonprofit organizations can operate nationwide, even though they are legally registered in one specific state as a domestic entity. Generally, charities incorporate in the state either where their headquarters are located in or where the majority of their activities take place. As your 501c3 organization grows and evolves, a need to operate in more than one state might often arise.
If you decide to expand your operations outside your state, you must keep in mind that you will have to comply with each specific state’s requirements where you choose to conduct your programs. The federal/IRS part of the compliance standards will not change if operating in additional states.
To be recognized as operating in another state, your nonprofit must be actively conducting its tax exempt program(s) outside its state of domicile. For instance, if you have a transitional housing facility in Georgia and you open another transitional housing location in Florida, you will be considered as operating in two states. In this case, you would have to register your Florida branch as a foreign corporation (here term “foreign” means “outside the state of domicile”). In some states, however, you will be required to file a “Certificate of Authority” to transact business in a particular state.
Please note that once you are registered as a foreign entity in a particular state, you are then required to do annual filings and reporting in the second state of operations, in addition to the filings you must do in your home state.
If your organization merely runs fundraisers in a different state, it doesn’t necessarily mean that it is operating in that state. For these operations, the organization will most likely be required by the state law to register with a designated authority to solicit donations. Failure to comply with the charitable solicitation rulings might result in penalties.
Each state has different registration requirements and exemptions. Thus, if you wish to operate and/or fundraise in all 50 states, you will have to do a thorough research of the proper registration procedures prior to conducting any activities in that state.
