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Mississippi nonprofits depend on public trust to carry out their charitable missions, and the state’s financial reporting laws are designed to promote transparency as organizations grow. While many states base their audit requirements solely on financial size, Mississippi also considers how an organization raises its funds, making its reporting rules more nuanced than those found elsewhere.

Generally, a registered charitable organization that receives more than $750,000 in monetary donations during a fiscal year must submit audited financial statements if its fundraising functions are carried on solely by unpaid persons. An audit is also required for a registered charitable organization whose fundraising functions are not carried on solely by unpaid persons, regardless of whether it exceeds the $750,000 monetary-donation threshold. Government grants are excluded from the threshold calculation. (Miss. Code § 79-11-507; Mississippi Secretary of State, Charity Online Registration Instructions)

These requirements are administered by the Mississippi Secretary of State’s Charities Division, which regulates charitable organizations soliciting contributions throughout the state.

Whether your nonprofit serves Jackson, Gulfport, Biloxi, Hattiesburg, Tupelo, Meridian, Oxford, or communities throughout Mississippi, understanding these unique requirements can help your organization remain compliant while strengthening donor confidence.

Mississippi Audit Requirements at a Glance

Threshold note: Miss. Code § 79-11-507 describes the volunteer-only review tier as at least $250,000 but not more than $750,000 in monetary donations, while the Secretary of State’s current online filing instructions describe it as more than $250,000 but less than $750,000. Organizations exactly at either endpoint should confirm the filing level with the Charities Division. (Miss. Code § 79-11-507; Mississippi Secretary of State, Charity Online Registration Instructions)

Quick Answer

Mississippi generally requires audited financial statements when a registered charitable organization receives more than $750,000 in monetary donations, excluding government grants. An audit is also required when the organization’s fundraising functions are not performed solely by unpaid persons, so paid fundraising activity can trigger the audit requirement even below the monetary threshold. (Miss. Code § 79-11-507; Mississippi Secretary of State, Charity Online Registration Instructions)

When Does Mississippi Require a Nonprofit Audit?

Mississippi’s financial reporting rules focus on monetary donations and the way fundraising functions are carried out, so the dollar calculation is only part of the analysis. (Miss. Code § 79-11-507)

Generally, audited financial statements are required when:

• The organization receives more than $750,000 in monetary donations, or
• The organization’s fundraising functions are not carried on solely by persons who are unpaid for those services. (Miss. Code § 79-11-507)

Government grants are excluded when determining whether the statutory monetary-donation threshold has been reached, making it important for organizations to track government grants separately from monetary donations. (Mississippi Secretary of State, Charity Online Registration Instructions)

Because both funding sources and fundraising methods influence compliance, nonprofits should evaluate these factors together rather than looking only at annual donation totals.

How Mississippi Treats Volunteer and Paid Fundraising

One aspect that makes Mississippi’s charitable reporting law especially distinctive is its treatment of volunteer fundraising.

Organizations whose fundraising functions are carried on entirely by unpaid persons are subject to the monetary thresholds in Miss. Code § 79-11-507. By contrast, a registered charity whose fundraising functions are not carried on solely by unpaid persons is required to file the audited financial statement described by the statute. (Miss. Code § 79-11-507)

This makes the fundraising model itself a compliance issue, not merely an operational choice.

Before adding compensated fundraising personnel or outside fundraising professionals, nonprofit leadership should evaluate whether that change will trigger the audit requirement. (Miss. Code § 79-11-507)

Government Grants Are Excluded From the Monetary-Donation Threshold

Another feature that separates Mississippi from many states is its treatment of government funding.

When determining whether the monetary-donation threshold has been reached, government grants are excluded from the calculation. (Mississippi Secretary of State, Charity Online Registration Instructions)

For nonprofits that receive substantial federal, state, or local grant funding, this distinction can significantly affect whether audited financial statements are required during a particular fiscal year.

Organizations should maintain separate accounting records for charitable contributions and government grants to simplify both compliance and audit planning.

Mississippi Law at a Glance

The Mississippi Secretary of State’s Charities Division administers charitable registration and financial reporting requirements for organizations soliciting contributions in the state. (Mississippi Secretary of State, Charities)

Rather than relying on total organizational revenue, Mississippi evaluates monetary donations together with the organization’s fundraising practices. Registered charities with more than $750,000 in monetary donations generally require an audit, and paid fundraising activity can independently trigger the audit requirement. (Miss. Code § 79-11-507)

Organizations anticipating major fundraising campaigns or considering the use of professional fundraising firms should review the reporting requirements before launching those initiatives.

Preparing for a Mississippi Nonprofit Audit

Organizations approaching the audit threshold should begin preparing several months before fiscal year-end.

Your CPA will commonly request:

• General ledger
• Trial balance
• Contribution schedules
• Government grant schedules
• Fundraising contracts
• Bank reconciliations
• Board meeting minutes
• Investment statements
• Fixed asset schedules
• Internal control documentation
• IRS Form 990
• Prior-year financial statements

Maintaining separate records for charitable contributions, government grants, and fundraising activities can help streamline the audit and annual registration process.

Common Reasons Mississippi Nonprofits Become Subject to an Audit

Many organizations become subject to an audit because of changes in fundraising strategy rather than simple financial growth.

Examples include:

• Launching a statewide fundraising campaign
• Hiring a professional fundraising firm
• Receiving several major donor gifts
• Conducting a successful capital campaign
• Expanding charitable programs throughout Mississippi
• Increasing annual charitable contributions above the statutory threshold

Monitoring both contribution totals and fundraising practices throughout the year allows nonprofit leadership to anticipate reporting requirements before annual filings are due.

Benefits Beyond Compliance

Although Mississippi requires audits for certain charitable organizations, an independent audit also provides long-term organizational value. Audits of nonissuer financial statements are performed under applicable AICPA Statements on Auditing Standards. (Miss. Code § 79-11-507; AICPA, Statements on Auditing Standards)

A financial statement audit can help:

• Increase donor confidence
• Strengthen board oversight
• Improve internal financial controls
• Demonstrate accountability to regulators
• Enhance grant competitiveness
• Improve financial reporting accuracy
• Support sustainable organizational growth

Many nonprofits find these benefits continue long after the annual registration has been completed.

Why Choose ELT CPA LLC?

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

Our professionals understand nonprofit accounting standards, charitable registration requirements, and Mississippi’s unique financial reporting rules, including the treatment of government grants and volunteer fundraising. We work collaboratively with nonprofit leadership to complete efficient audit engagements while minimizing disruption to daily operations.

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

Frequently Asked Questions

Does Mississippi use contributions or total revenue?

Mississippi does not use total organizational revenue as the audit threshold. The statute focuses on monetary donations and also considers whether fundraising functions are performed solely by unpaid persons. (Miss. Code § 79-11-507)

Are government grants included in the $750,000 calculation?

No. The Mississippi Secretary of State’s current charity filing instructions exclude government grants from the monetary-donation calculation used for the review and audit thresholds. (Mississippi Secretary of State, Charity Online Registration Instructions)

Why does fundraising method matter?

Because Miss. Code § 79-11-507 requires the audit-level financial statement when fundraising functions are not carried on solely by unpaid persons, compensated fundraising activity can trigger an audit even when monetary donations do not exceed $750,000. (Miss. Code § 79-11-507)

Who regulates charitable organizations in Mississippi?

The Mississippi Secretary of State’s Charities Division administers charitable registration and regulates charitable organizations and fundraisers that solicit contributions in Mississippi. (Mississippi Secretary of State, Charities)