AB 488 Update: Key Developments to Know

Since AB 488’s implementing regulations took effect, the most important development has been confirmation that California intends to treat platform compliance as an enforcement priority rather than a purely administrative filing program. At the same time, at least one other state has adopted a comparable framework, and California legislators have continued to tinker with AB 488’s mechanics in response to practical compliance challenges.

Enforcement has moved from theory to practice

In November 2025, the California Attorney General issued a cease and desist order to a fundraising platform, directing it to immediately stop operations related to charitable solicitations in California. The Attorney General alleged the platform was not properly registered and had delayed remitting donations to nonprofits, with withheld funds described as approximately $500,000, and sought monetary penalties of up to $70,000. 

The order is notable for nonprofit audiences for two reasons.

1. The alleged misconduct was not limited to misstatements or technical filing errors. The core allegation involved the handling and timely distribution of charitable funds, which sits at the center of AB 488’s policy rationale. 
2. The Attorney General’s demanded remediation steps included operational shutdown, a broad accounting of charitable assets and relationships, and transfer of assets into a blocked account, which underscores how disruptive enforcement can be for both platforms and recipient charities when problems arise

Around the same period, reporting also highlighted compliance gaps in the marketplace, including claims that a meaningful share of donation platforms had not completed required registration or reporting steps. While reporting varies in quality and should be read cautiously, it is consistent with what many practitioners have observed, AB 488 compliance has been uneven across the long tail of platforms and embedded giving tools.

Administrative enforcement is also built into the program

AB 488 compliance is not only about cease and desist orders. The rules include built-in consequences for missed filings. For example:

• If the annual platform report is not timely filed, the platform’s or platform charity’s registration becomes delinquent.
• A delinquent registrant is not in good standing and is prohibited from soliciting or operating as a platform or platform charity in California.
• Late fees and automatic suspension can apply. 

In practice, these provisions matter because many platforms adopt automated controls. When a charity or an intermediary falls out of good standing, fundraising visibility and payouts can be interrupted even outside California, depending on how a platform implements compliance rules. 

California is still refining the machinery

California has not treated AB 488 as a finished product. Legislative proposals have been introduced to address operational friction points, particularly around how platforms determine “good standing” at scale. One proposal would expressly allow reliance on machine-readable electronic lists or APIs published by the IRS, the Franchise Tax Board, and the Attorney General’s registry. 

This is a practical issue. AB 488 effectively requires continuous eligibility screening, and the ability to rely on standardized electronic data sources can reduce both cost and error rates.

Other states are beginning to follow the model

Hawaii is the clearest example of another state adopting a platform-specific framework similar in concept to California’s. Hawaii enacted Act 205 in 2024 to regulate charitable fundraising platforms and platform charities, and then amended or adjusted the framework in 2025, including extending the effective date to July 1, 2026. 

While details vary by jurisdiction, Hawaii’s approach reflects the same basic policy move California made, treating certain internet-enabled fundraising intermediaries as regulated fundraising actors rather than as neutral technology vendors. 

As for other states, the broader trend line is clear even if legislative outcomes differ. State charity regulators have been steadily modernizing registration and reporting infrastructure and are paying closer attention to online giving channels. Some states may choose to address platform behavior through existing professional fundraiser, commercial co-venturer, or consumer protection authority rather than adopting AB 488-style categories. The practical result for nonprofits can be similar, more scrutiny of who is soliciting, how donor disclosures are presented, and how funds move from the donor to the intended recipient.

What nonprofits should take from this update

Even though nonprofits are not always the primary registrants under AB 488, enforcement activity changes the risk profile for charities that rely on platforms.

A practical takeaway list for nonprofits and counsel:

1. Treat platform due diligence as an ongoing compliance function, not a one-time vendor selection step. 
2. Ask platforms how they handle AB 488 consequences, including delinquency, automatic suspension, payout holds, and charity takedowns triggered by “good standing” checks. 
3. Monitor similar developments in other states, with Hawaii as the most direct indicator that California’s model is exportable. 

Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on federal tax and fundraising regulations nationwide. Ellis also advises donors concerning major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.