Inside NAAG/NASCO 2025: A Regulator’s Perspective on Nonprofit Compliance

On October 7, I had the opportunity to attend the public portion of the NAAG/NASCO Annual Charities Conference. This is the annual conference of the National Association of State Charity Officials, held this year in Columbus, Ohio. This gathering brings together state charity regulators, attorneys general offices, and nonprofit professionals to discuss oversight, compliance, and emerging trends in the charitable sector. It’s a rare opportunity to see nonprofit organizations through the eyes of the regulators who oversee them.

Seeing Compliance Through the Regulator Lens

One of the most valuable aspects of the conference was the candid conversations with state regulators. Unlike academic discussions or legal treatises, these sessions focused on practical realities: balancing limited resources with the complexity of multistate fundraising, protecting consumers, and ensuring transparency in charitable operations.

Fiduciary Duties: Compliance and Accountability Over Obedience

A recurring theme was the emphasis on fiduciary duties for nonprofit boards. Regulators consistently highlighted four core duties:

  1. Duty of Care – acting thoughtfully and prudently in organizational decision-making.

  2. Duty of Loyalty – placing the organization’s interests above personal or external interests.

  3. Duty of Compliance – ensuring the organization remains faithful to its mission, adheres to governing documents, and follows all relevant state and federal laws. This includes familiarity with articles of incorporation, bylaws, codes of ethics, and compliance with registration and reporting obligations such as filings with the IRS, state attorneys general, and secretaries of state.

  4. Duty to Manage Accounts – focusing on financial stability and accountability by establishing policies, monitoring budgets, and aligning spending with programmatic goals.

Interestingly, regulators did not frame the last two duties in terms of the traditional “duty of obedience.” Instead, they emphasized practical, operational compliance and financial stewardship, reflecting their day-to-day priorities in oversight.

States Mining IRS Data for Oversight

Another trend that caught my attention was the use of publicly available IRS materials by states to identify charities operating in their jurisdictions without proper registration. By reviewing Form 990 filings, EO Select Check, the IRS Master Business List, and other public records, regulators can proactively reach out to organizations that appear to be soliciting or operating within their jurisdiction, but are not registered. Letters or outreach are sent to invite compliance, a clear shift from the traditional complaint-driven approach.

For nonprofits, this highlights a key risk: organizations operating nationally or online must monitor their state registration footprint, as IRS filings effectively serve as a public record of compliance.

Regulators Want to Help

Throughout the conference, multiple regulators emphasized that nonprofits should call their offices with questions rather than waiting until issues arise. They made it clear that they want to help organizations understand compliance obligations, navigate registration and reporting requirements, and address potential concerns proactively. This underscores an important point: regulators aren’t just enforcers, they can be partners in ensuring transparency and proper governance.

Practical Takeaways for Nonprofits

From my perspective, several lessons emerged for nonprofits:

  • Maintain accurate state registrations, especially if operating in multiple states.

  • Recognize that IRS filings are actively reviewed by state regulators.

  • Align public disclosures, fundraising communications, and websites with state compliance requirements.

  • Consider proactive engagement with regulators to address questions or potential gaps before enforcement actions arise.

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