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Wisconsin requires charitable organizations that solicit contributions within the state to register and provide annual financial information to the Wisconsin Department of Financial Institutions, or DFI. Larger charities must supplement that annual reporting with financial statements audited by an independent Certified Public Accountant.

Under current Wisconsin law, a charitable organization that receives more than $1 million in annual contributions during its most recently completed fiscal year generally must submit audited financial statements prepared in accordance with generally accepted accounting principles. The financial statements must include the opinion of an independent CPA.  (Wis. Stat. § 202.12(1)(b)2r. and (3)(b))

Wisconsin’s audit threshold is based on contributions, not total revenue, total expenses, or total assets. That distinction is important for organizations with significant program-service income, membership revenue, investment returns, government funding, or other receipts that may not be classified as contributions.

The $1 million threshold is also relatively new. Wisconsin increased the former $500,000 audit threshold through 2023 Wisconsin Act 151, while simultaneously increasing the financial-review threshold. Organizations relying on older compliance charts may therefore be working from outdated requirements.  (2023 Wisconsin Act 151)

Whether your nonprofit operates in Milwaukee, Madison, Green Bay, Kenosha, Racine, Appleton, Eau Claire, La Crosse, Waukesha, or elsewhere in Wisconsin, monitoring contribution activity throughout the fiscal year can help prevent an unexpected audit requirement.

Wisconsin Audit Requirements at a Glance

Wisconsin’s current statute requires a reviewed financial statement when contributions exceed $500,000 but do not exceed $1 million. When contributions exceed $1 million, audited financial statements are required. These statutory amounts are subject to possible adjustment by the DFI under the inflation-adjustment provisions of the law.  (Wis. Stat. § 202.12(3)(b) and (bm))

Quick Answer

A Wisconsin charitable organization that receives more than $1 million in contributions during its most recently completed fiscal year generally must submit audited financial statements to the Wisconsin Department of Financial Institutions. (Wis. Stat. § 202.12(3)(b))

The statements must be prepared in accordance with generally accepted accounting principles and include an audit opinion from an independent CPA. They must ordinarily be filed within 12 months after the end of the applicable fiscal year.

When Does Wisconsin Require a Nonprofit Audit?

Wisconsin uses a graduated financial-reporting system based on the amount of contributions received during the organization’s most recently completed fiscal year.

The DFI provides different annual-report forms depending on an organization’s contribution level and circumstances. Form 1943 is an affidavit available to certain smaller organizations, while Forms 1952 and 308 are used for other annual financial reporting situations. (Wisconsin DFI, Charitable & Professional Organization Forms)

Because Wisconsin’s statute says “in excess of $1,000,000,” an organization at exactly $1 million falls within the statutory review range rather than the audit range, assuming no later inflation adjustment changes the applicable dollar amounts. Organizations very close to the threshold should confirm the current amount with the DFI before filing.  (Wis. Stat. § 202.12(3)(b))

Wisconsin Raised Its Audit Threshold

Wisconsin previously required audited financial statements when a charity received more than $500,000 in contributions. (2023 Wisconsin Act 151)

Through 2023 Wisconsin Act 151, the state increased the threshold as follows: (2023 Wisconsin Act 151)

The legislation also changed the contribution amounts used when determining eligibility for certain waivers.

This change may eliminate the state-mandated audit for some organizations that previously fell between $500,000 and $1 million in contributions. Those organizations may still need a CPA review and could remain subject to an audit required by a grant agreement, lender, board policy, organizational bylaws, federal funding rules, or another state.

Wisconsin Uses Contributions—Not Total Revenue

The audit requirement is triggered by annual contributions, rather than the organization’s total accounting revenue.

A nonprofit may receive revenue from several sources, including:

• Individual donations
• Foundation and corporate grants
• Government awards
• Program-service fees
• Membership dues
• Special events
• Investment income
• Sales of goods or services
• Rental income
• Other operating activities

Not every item reported as revenue on an income statement or IRS Form 990 will necessarily be treated as a contribution for Wisconsin’s threshold.

For example, a nonprofit could report $1.8 million in total revenue consisting of:

If only $700,000 is properly classified as contributions, the organization may fall within Wisconsin’s CPA-review range rather than its audit range.

The calculation should be reconciled to the general ledger, financial statements, donor records, grant schedules, and applicable Form 990 contribution lines. Organizations should avoid using total revenue without first determining which amounts meet the applicable contribution definition.

What May Count as a Contribution?

Depending on the underlying facts, contribution activity may include:

• Individual gifts
• Corporate charitable gifts
• Foundation grants
• Online donations
• Direct-mail campaign receipts
• Contributions received through fundraising events
• Donated property
• Certain noncash gifts
• Amounts collected by a professional fundraiser on the charity’s behalf

Classification can become more complicated when payments include both a charitable and an exchange component. Examples include gala tickets, sponsorship packages, membership arrangements, and sales conducted as part of a charitable campaign.

Organizations near the threshold should maintain schedules that distinguish:

1. Contributions without donor benefits
2. Payments containing an exchange component
3. Program-service revenue
4. Government grants and contracts
5. Membership income
6. Investment and other noncontribution revenue

The accounting treatment should be evaluated consistently across the audited financial statements, Wisconsin annual report, and IRS Form 990.

The Wisconsin Annual Financial Report

Every charitable organization registered in Wisconsin generally must file an annual financial report with the DFI. The purpose of the report is to provide sufficiently detailed information about the charity’s financial activities so that the public can evaluate its operations.  (Wis. Stat. § 202.12(3)(a); Wisconsin DFI, Charitable Organizations FAQ)

The DFI currently provides three principal annual-report forms: (Wisconsin DFI, Charitable & Professional Organization Forms)

Form 1943 — Affidavit in Lieu of Annual Financial Report

This form may be available when an organization received $25,000 or less in contributions during its most recently completed fiscal year. It may also apply to certain locally operating organizations receiving less than $50,000 and soliciting only within the county where their principal office is located.

Form 1952 — Charities Financial Report

Form 1952 applies to certain organizations that must file an annual report but qualify for a financial-reporting option other than the full Form 308.

Form 308 — Charitable Organization Annual Financial Report

Form 308 provides detailed reporting of the charity’s financial and operational activity. Organizations subject to reviewed or audited financial-statement requirements may need to submit the applicable CPA report together with the annual filing.

An organization should review the current DFI instructions each year to determine which form applies.

Wisconsin Has Two Separate Annual Deadlines

Wisconsin distinguishes between:

1. Registration renewal
2. Annual financial reporting

These are separate requirements with different deadlines.

Registration Renewal

Charitable organization registrations expire on July 31 each year. Registered organizations must complete the renewal process to continue soliciting contributions in Wisconsin.  (Wis. Stat. § 202.12(1)(e); Wisconsin DFI, Renewal FAQ)

Annual Financial Report

The annual financial report must generally be submitted within 12 months after the end of the organization’s fiscal year. The DFI states that the financial report does not carry a separate filing fee.  (Wis. Stat. § 202.12(3)(a); Wisconsin DFI, Charitable Organizations FAQ)

For example, a calendar-year organization may have:

• A July 31 registration-renewal deadline
• A December 31 annual financial-report deadline for the preceding calendar year

Confusing these two filings may result in an organization renewing its registration but failing to submit the required annual financial report—or submitting the financial report while allowing its registration to lapse.

Initial Wisconsin Registration May Also Require an Audit

The audit requirement can apply not only to annual reports but also to an organization’s initial Wisconsin registration.

An organization applying to register after completing a fiscal year must generally submit financial information for its most recently completed year. If contributions exceeded the statutory audit threshold, the initial application must include GAAP financial statements with the opinion of an independent CPA.  (Wis. Stat. § 202.12(1)(b); Wisconsin DFI Form 296)

The initial application may also require:

• Organizational documents
• Bylaws
• The applicable Wisconsin annual financial-report form
• IRS determination documentation
• Fundraising contracts, when applicable
• Organizational and leadership information

A national charity entering Wisconsin for the first time should therefore evaluate its prior-year contribution total before beginning the registration application.

Can a Wisconsin Nonprofit Request a Waiver?

Wisconsin permits a charity to apply for a waiver from the reviewed or audited financial-statement requirement under limited circumstances. (Wis. Stat. § 202.12(3)(d); Wisconsin DFI Form 1953)

The waiver request must generally:

• Be submitted in writing
• Be received within 90 days after fiscal year-end
• Include documentation satisfying the statutory conditions
• Demonstrate that the organization had contributions below the specified amount during each of the previous three years
• Show that the unusual increase was caused by one or more unusually large contributions from a single contributor

For an audit waiver, current law generally requires that the charity received less than $300,000 in contributions during each of the preceding three fiscal years and that one or more contributions from a single contributor exceeded $700,000 during the year for which the waiver is requested.  (Wis. Stat. § 202.12(3)(d); Wisconsin DFI Form 1953)

The DFI provides Form 1953 for waiver applications. A waiver should not be assumed merely because a large, one-time gift caused the organization to cross the threshold. Approval depends on satisfying the statutory criteria and submitting the request on time.

Wisconsin Solicitation Disclosures

Wisconsin requires certain disclosures when an unpaid solicitor requests contributions on behalf of a registered charity. (Wis. Stat. § 202.12(6m))

Written solicitations, pledge confirmations, receipts, and reminders generally must state that a financial statement disclosing the charity’s assets, liabilities, fund balances, revenue, and expenses for the preceding fiscal year will be provided upon request. The financial statement must divide expenses among management and general, program services, and fundraising, and it must be consistent with information reported in the charity’s annual filing.

This requirement makes consistency among fundraising materials, state filings, and audited financial statements particularly important.

Organizations should verify that their written appeals and contribution acknowledgments use the required disclosure language when applicable.

Professional Fundraisers and Fundraising Counsel

Wisconsin separately regulates professional fundraisers and fundraising counsel that provide compensated services to charitable organizations. (Wis. Stat. § 202.12(7); Wisconsin DFI forms guidance)

A charity working with an outside fundraising provider should maintain:

• A written contract
• Documentation of services performed
• Gross contribution reports
• Fundraising expense records
• Compensation calculations
• Net proceeds remitted to the charity
• Copies of state registrations and filings
• Board approval or oversight documentation

Wisconsin’s initial charitable-registration application asks for applicable solicitation contracts, while the DFI maintains separate registration forms for professional fundraisers and fundraising counsel.

These records may become relevant during the financial statement audit, particularly when testing contribution completeness, fundraiser compensation, and the accuracy of functional-expense allocations.

Preparing for a Wisconsin Nonprofit Audit

A Wisconsin nonprofit expecting contributions to exceed $1 million should begin audit planning before fiscal year-end.

Your CPA will commonly request:

• Year-end trial balance
• General ledger
• Bank reconciliations
• Donor and contribution schedules
• Grant agreements
• Contribution receivable detail
• Noncash gift documentation
• Special-event reports
• Sponsorship agreements
• Program-service revenue schedules
• Accounts receivable and payable
• Payroll reports
• Fixed-asset schedules
• Investment statements
• Debt agreements
• Board and committee minutes
• Net-asset restriction schedules
• Functional-expense allocations
• Professional fundraiser contracts
• Internal-control documentation
• Prior-year financial statements
• Draft IRS Form 990
• Draft Wisconsin annual-report information

Organizations should also prepare a threshold reconciliation showing:

1. Total financial-statement revenue
2. Contribution revenue
3. Program-service and exchange revenue
4. Investment and other revenue
5. Amount reported as contributions for Wisconsin purposes

Completing this reconciliation before year-end helps management determine whether a review or audit will be required.

Common Wisconsin Compliance Problems

Relying on the Former $500,000 Audit Threshold

Wisconsin increased the statutory audit threshold to more than $1 million through 2023 Wisconsin Act 151. Older compliance articles may still show the former amount.

Using Total Revenue Instead of Contributions

Wisconsin’s CPA reporting levels are based on contributions. The total revenue figure in the financial statements may not determine whether an audit is required.

Overlooking the CPA Review Range

An organization that does not exceed $1 million may still need reviewed financial statements when contributions are more than $500,000.

Assuming Exactly $1 Million Triggers an Audit

The statute requires an audit when contributions are in excess of $1 million. Exactly $1 million falls within the statutory review range, subject to any applicable inflation adjustment.

Confusing Renewal With the Annual Financial Report

Registration renewal is due in connection with the July 31 expiration date. The annual financial report is separately due within 12 months after fiscal year-end.

Missing the Waiver Deadline

A waiver application generally must be received within 90 days after fiscal year-end. Waiting until the annual report is due may eliminate the waiver option.

Failing to Reconcile Wisconsin Reports to Form 990

Contribution totals, functional expenses, net assets, and fundraising costs should be consistent across the state filing, audited financial statements, and federal return.

Waiting Too Long to Hire an Auditor

Audit procedures may include confirmations, contribution testing, grant testing, expense testing, review of restrictions, internal-control inquiries, and financial-statement drafting. Beginning shortly before the filing deadline may leave insufficient time.

Wisconsin Law at a Glance

Wisconsin’s charitable solicitation and reporting requirements are primarily contained in Chapter 202, Subchapter II of the Wisconsin Statutes. (Wis. Stat. ch. 202, subch. II)

Wisconsin Statutes §202.12 governs: (Wis. Stat. § 202.12)

• Registration of charitable organizations
• Annual financial reporting
• CPA review and audit thresholds
• Waiver requests
• Registration exemptions
• Solicitation disclosures
• Relationships with fundraising professionals

The DFI administers these requirements through its Division of Corporate and Consumer Services, Charities Section.

The Department also maintains public-facing online services that allow donors and other users to search charitable organizations and review reported financial activity.

Benefits Beyond Wisconsin Compliance

An independent financial statement audit can provide substantial value beyond satisfying the DFI filing requirement.

Audited financial statements may help an organization:

• Strengthen board oversight
• Improve internal controls
• Identify accounting errors
• Meet grant and lender requirements
• Improve Form 990 accuracy
• Document donor restrictions
• Evaluate functional-expense allocations
• Support multistate charitable registration
• Increase confidence among donors and funders
• Prepare for continued growth

A Wisconsin nonprofit may also need an audit even when its contributions remain below the state threshold. Audit requirements can arise from federal awards, private grant agreements, bank financing, organizational bylaws, board policy, national-affiliate rules, or another state’s charitable-registration laws.

Why Choose ELT CPA LLC?

ELT CPA LLC provides independent financial statement audit services for nonprofit and charitable organizations operating in Wisconsin.

Our team understands that Wisconsin’s audit requirement is based on annual contributions rather than total revenue. We work with nonprofits to classify contribution activity, reconcile financial statements to Form 990 and Wisconsin reporting forms, evaluate the CPA review and audit thresholds, and organize the supporting documentation required for an efficient engagement.

Whether your organization is crossing the $1 million threshold for the first time, moving from a review to an audit, or continuing an established annual audit process, ELT CPA LLC can help you prepare reliable financial statements and satisfy applicable reporting requirements.

Frequently Asked Questions

What is Wisconsin’s nonprofit audit threshold?

A charitable organization generally must submit audited financial statements when it receives more than $1 million in annual contributions during its most recently completed fiscal year.

Was the Wisconsin audit threshold previously lower?

Yes. Wisconsin previously used a threshold of more than $500,000. 2023 Wisconsin Act 151 increased it to more than $1 million.

Is the threshold based on total revenue?

No. The statutory threshold is based on annual contributions, not total organizational revenue.

Does exactly $1 million require an audit?

The statute requires an audit when contributions are in excess of $1 million. An organization with exactly $1 million generally falls within the CPA-review range, subject to any current inflation adjustment.

When is a CPA review required?

A reviewed financial statement is generally required when contributions are more than $500,000 but not more than $1 million.

Which agency regulates charitable organizations in Wisconsin?

The Wisconsin Department of Financial Institutions, Division of Corporate and Consumer Services, Charities Section administers charitable registration and financial reporting.  (Wisconsin DFI, Charitable Organizations FAQ)

When is the Wisconsin annual financial report due?

It is generally due within 12 months after the end of the organization’s fiscal year.

Is the annual report deadline the same as the renewal deadline?

No. The registration renewal and annual financial report are separate requirements. Registrations expire on July 31, while the financial report is generally due within 12 months after fiscal year-end.

Can a Wisconsin charity request an audit waiver?

Yes, but only under limited circumstances. The written request generally must be filed within 90 days after fiscal year-end and satisfy the contribution-history and one-time-gift requirements established by statute.

Are Wisconsin charity financial reports publicly available?

Wisconsin’s online charitable-organization services allow users to search organizations and review reported financial activity.

Can an audit be required even below the state threshold?

Yes. An audit may still be required by a federal award, private grant, lender, board policy, bylaws, affiliate agreement, or another state.