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Illinois nonprofits play an important role in supporting communities through education, healthcare, social services, religious organizations, and charitable programs. As organizations grow—or begin using paid outside fundraising assistance—they may become subject to financial reporting requirements that include an independent CPA audit.

Unlike many states that rely on a single financial threshold, Illinois law provides two primary paths that can trigger audited financial statements. A registered charitable organization that receives more than $500,000 in contributions during a 12-month period must file financial statements accompanied by an independent CPA opinion. The same audit-level reporting applies when an organization receives more than $25,000 in contributions and its fundraising functions are not carried on solely by staff employees or unpaid individuals. (225 ILCS 460/4(a))

These requirements are administered by the Illinois Attorney General’s Charitable Trust Bureau, which oversees charitable registration and annual reporting in the state. The Attorney General’s current Charity Registration guidance also notes the contribution-threshold changes that took effect January 1, 2024. (Illinois Attorney General, Charity Registration)

Whether your nonprofit serves Chicago, Springfield, Rockford, Peoria, Naperville, Champaign, Aurora, or communities across Illinois, understanding these rules before your annual filing can help avoid compliance issues and strengthen financial accountability.

Illinois Audit Requirements at a Glance

Quick Answer

Illinois generally requires audited financial statements when a registered charitable organization receives more than $500,000 in contributions during a 12-month period. An audit-level filing can also be required when contributions exceed $25,000 and the organization’s fundraising functions are not carried on solely by staff employees or unpaid individuals. (225 ILCS 460/4(a))

When Does Illinois Require a Nonprofit Audit?

Illinois evaluates both annual contribution levels and how fundraising functions are carried out when determining whether audited financial statements are required. (225 ILCS 460/4(a))

An audit is generally required when a charitable organization:

• Receives more than $500,000 in contributions during the applicable 12-month period, or
• Receives more than $25,000 in contributions and its fundraising functions are not carried on solely by staff employees or unpaid individuals. (225 ILCS 460/4(a))

Because Illinois considers both contribution levels and fundraising structure, organizations should evaluate their annual contributions and any use of paid outside fundraising assistance before preparing the annual filing.

Illinois’ Professional Fundraiser Rule

One feature that distinguishes Illinois from many other states is that the audit requirement can apply at a much lower contribution level when fundraising functions are not performed solely by staff employees or unpaid individuals. (225 ILCS 460/4(a))

This can affect nonprofits that rely on paid outside fundraising support. Organizations using professional fundraisers, professional solicitors, fundraising counsel, or other compensated third parties should review their arrangements carefully and determine whether the statutory rule applies.

Professional fundraisers often include:

• Professional solicitors
• Fundraising counsel
• Third-party fundraising companies
• Campaign management firms

Organizations considering outside fundraising assistance should understand these reporting requirements before entering into fundraising agreements. The Illinois Attorney General provides registration, annual-report, and professional-fundraising forms through its Charity Registration resources and online filing system. (Illinois Attorney General, Charity Registration; Charitable Trust Online Filing System)

Illinois Law at a Glance

Charitable organizations subject to Illinois registration requirements file with the Illinois Attorney General’s Charitable Trust Bureau. The Attorney General’s current registration page provides the AG990-IL annual report and related filing instructions. (Illinois Attorney General, Charity Registration)

Illinois differs from many states because its audit rule is tied to charitable contributions rather than total gross revenue, and because fundraising structure can create an additional audit trigger. Contributions above $500,000 generally trigger the independent CPA opinion requirement, while contributions above $25,000 can trigger the same requirement when fundraising is not carried on solely by staff or unpaid individuals. (225 ILCS 460/4(a))

For organizations not subject to subsection (a), Illinois law also provides a CPA review tier for contributions in excess of $300,000 but not more than $500,000. (225 ILCS 460/4(b)(3))

Preparing for an Illinois Nonprofit Audit

Organizations approaching either Illinois audit trigger should begin preparing well before fiscal year-end. Illinois law generally requires the annual report within six months after fiscal year-end, or by June 30 for organizations keeping books on a calendar-year basis. (225 ILCS 460/4(a))

Your CPA will commonly request:

• General ledger
• Trial balance
• Revenue schedules
• Fundraising revenue reports
• Professional fundraising contracts
• Bank reconciliations
• Board meeting minutes
• Grant documentation
• Investment schedules
• Internal control documentation
• IRS Form 990
• Prior-year financial statements

Organizations using paid outside fundraisers should also maintain complete copies of fundraising agreements and campaign records. These documents can be important both for audit preparation and for Illinois charitable reporting requirements. (Illinois Attorney General, Charity Registration)

Common Reasons Illinois Nonprofits Become Subject to an Audit

Illinois organizations often become subject to an audit because of growth in operations or changes in fundraising strategy.

Examples include:

• Exceeding $500,000 in annual gross revenue
• Hiring a professional solicitor for a capital campaign
• Retaining fundraising counsel for a major giving initiative
• Expanding statewide fundraising efforts
• Launching multi-channel fundraising campaigns
• Receiving significant new grants or donations

Evaluating contribution totals and fundraising arrangements before the end of the fiscal year allows nonprofit leadership to prepare for audit requirements before annual filings are due. (225 ILCS 460/4(a))

Benefits Beyond Compliance

Although Illinois law requires audits under certain circumstances, an independent audit also provides assurance on whether financial statements are presented fairly in accordance with the applicable financial reporting framework. Audits of nonissuer financial statements are performed under AICPA Statements on Auditing Standards. (AICPA, Statements on Auditing Standards)

A financial statement audit can help your organization:

• Demonstrate accountability to donors
• Improve governance and board oversight
• Strengthen internal controls
• Increase confidence among grantmakers
• Support future fundraising efforts
• Improve financial reporting processes
• Enhance organizational credibility

Many nonprofits discover that the audit becomes a valuable management tool as the organization continues to grow.

Why Choose ELT CPA LLC?

ELT CPA LLC provides independent nonprofit financial statement audit services for charitable organizations throughout Illinois.

Our professionals understand nonprofit accounting standards, charitable registration requirements, and Illinois’ unique audit rules, including those affecting organizations that work with professional fundraising firms. We help nonprofit leaders complete efficient audits while minimizing disruption to day-to-day operations and preparing organizations for annual reporting requirements.

Whether your organization is preparing for its first audit or has completed audits for years, ELT CPA LLC can help you navigate Illinois’ nonprofit reporting requirements with confidence.

Frequently Asked Questions

Does Illinois use revenue or contributions?

Illinois’ primary audit threshold is based on charitable contributions, not total gross revenue. A registered organization receiving more than $500,000 in contributions during the applicable 12-month period is subject to the audit-level reporting requirement. (225 ILCS 460/4(a))

Can we need an audit even if we receive less than $500,000 in contributions?

Yes. If contributions exceed $25,000 and the organization’s fundraising functions are not carried on solely by staff employees or unpaid individuals, the audit-level reporting requirement in subsection 4(a) can apply. (225 ILCS 460/4(a))

How does Illinois treat paid fundraising assistance?

Illinois law focuses on whether fundraising functions are carried on solely by staff employees or unpaid individuals. Organizations using compensated outside fundraising assistance should review the rule and their contracts carefully. (225 ILCS 460/4(a); Illinois Attorney General, Charity Registration)

Who oversees charitable organizations in Illinois?

Charitable organizations subject to registration and annual reporting requirements file with the Illinois Attorney General’s Charitable Trust Bureau. (Illinois Attorney General, Charity Registration)