TLDR
Pennsylvania charities soliciting contributions register with the Department of State Bureau of Corporations and Charitable Organizations under the Solicitation of Funds for Charitable Purposes Act, filing Form BCO-10 annually. The audit threshold is tiered: compilation under $100,000, review at $100,000–$250,000, audit at $250,000+ in contributions, with the audit moving up to $750,000 for organizations not using paid solicitors. Sales-tax exemption is administered by the Department of Revenue (Form REV-72). Major federal pass-throughs flow through DHS, PDE, DOH, and DCED.
Pennsylvania has two unusual structural features that catch new compliance staff. First, incorporation requires publication in two newspapers, one of which must be a legal newspaper of general circulation in the county — adding 2–3 weeks to the setup timeline most other states do not have. Second, Pennsylvania uses a 10-year Decennial Report cycle instead of an annual corporate report, which makes the deadline easy to forget when leadership turns over. The audit thresholds are also unusually granular, tied to whether a paid solicitor is used.
This FAQ collects the questions Pennsylvania executive directors and grants managers actually ask in the first year. Every answer is grounded in Pennsylvania statute, IRS guidance, or state agency publication, with sources cited so you can verify the current rule.
Where to go next
- The Pennsylvania state hub: GrantPipe for Pennsylvania nonprofits
- Step-by-step setup: Pennsylvania nonprofit startup guide
- Audit thresholds across states: Nonprofit audit requirements by state
- Free download: Pennsylvania compliance checklist
Implementation realities and migration notes
Mid-sized nonprofits in this category typically inherit a tangle of restricted-fund histories: federal pass-throughs, state agency contracts, family-foundation grants, and partner funding stretching back many years. Migrating that history cleanly is not optional — auditors and program officers will ask questions that require a year-by-year reconstruction. Implementation timelines run six to ten weeks for organizations that scope the data inventory before signing. Cutting corners on migration to chase a fast launch usually surfaces gaps during the next single-audit cycle, and the cost of fixing those gaps after the fact is meaningfully higher than doing migration right at the start.
Plan accordingly, and require any vendor on the shortlist to demonstrate restricted-fund handling, grant tracking, and donor record migration on a representative sample of your actual historical data before you sign. Vendors that decline to demo on real data are filtering you out for a reason. The demo on your data is where the gaps surface — both the gaps in the vendor’s product and the gaps in your existing records that you will need to clean up regardless of which system you choose. Use that demo to set realistic expectations with the board and the audit committee about timeline and scope before contracts get signed.
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Frequently asked
Frequently Asked Questions
Do I have to register with Pennsylvania to solicit donations?
Yes, in most cases. The Pennsylvania Solicitation of Funds for Charitable Purposes Act (10 P.S. § 162.1 et seq.) requires charitable organizations soliciting contributions in Pennsylvania to register with the Department of State Bureau of Corporations and Charitable Organizations before soliciting. Registration is initiated and renewed using Form BCO-10. Specific exemptions exist for certain religious organizations, qualifying educational institutions, and small charities meeting strict criteria. Most operating 501(c)(3) charities must register.
What is Form BCO-10 and when is it due?
Form BCO-10 (Charitable Organization Registration Statement) is the annual filing with the PA Bureau of Corporations and Charitable Organizations. It is due 135 days (4.5 months) after fiscal year end (May 15 for calendar-year filers). Pennsylvania allows up to two 90-day extensions, conditional on filing the federal Form 990 extension. The fee scales with gross national contributions: $15 for organizations under $25,000, ranging up to $250 for organizations with $500,000 or more. The form requires a copy of Form 990 and audit/review when applicable.
What are Pennsylvania's audit thresholds for nonprofits?
Tiered under 10 P.S. § 162.5(f). Organizations with gross annual contributions less than $100,000 may submit a financial statement compiled by an independent CPA (or unaudited statement). $100,000–$250,000 requires a CPA review. $250,000–$750,000 requires a CPA audit unless the organization does not use a paid solicitor and elects review status; in that case, a review is sufficient. Above $750,000 in contributions, an audit is required regardless. Use of a professional solicitor lowers thresholds.
How does Pennsylvania sales-tax exemption work for nonprofits?
A 501(c)(3) organization applies separately to the Pennsylvania Department of Revenue using Form REV-72 (Application for Sales Tax Exemption). The Department issues a Sales Tax Exemption Certificate, which the organization presents to vendors when purchasing items for the exempt institution's use. Pennsylvania also imposes a use tax on out-of-state purchases by exempt entities for non-exempt activities. Sales by the nonprofit are generally taxable; isolated fundraising events may qualify for narrow exemptions.
Are Pennsylvania nonprofits exempt from property tax?
Not automatically. Pennsylvania uses the 'institution of purely public charity' standard, which combines the Pennsylvania Constitution Article VIII Section 2 with the HUP test (Hospital Utilization Project, 1985) and the Institutions of Purely Public Charity Act (Act 55 of 1997). The five-prong HUP test requires that the entity advance a charitable purpose, donate or render gratuitously a substantial portion of its services, benefit a class of persons who are legitimate subjects of charity, relieve government of some of its burden, and operate entirely free from private profit motive. Application is to the local county Board of Assessment Appeals.
How does payroll registration work in Pennsylvania?
Federal: EIN and EFTPS. State: register with the Pennsylvania Department of Revenue for state income tax withholding (Pennsylvania has a flat 3.07% personal income tax) and the Pennsylvania Department of Labor and Industry for unemployment insurance. 501(c)(3) organizations may elect the reimbursing-employer method for unemployment under 43 P.S. § 905. Local: Pennsylvania has local Earned Income Tax (EIT) administered by tax collection districts; employers register with the relevant TCD. Workers' compensation is mandatory for most employers.
How do I incorporate a nonprofit in Pennsylvania?
File Articles of Incorporation under the Pennsylvania Nonprofit Corporation Law of 1988 (15 Pa.C.S. § 5101 et seq.) with the Department of State, Bureau of Corporations and Charitable Organizations, $125 filing fee. Pennsylvania also requires publication of the intent to incorporate (or actual incorporation) in two newspapers — one a legal newspaper of general circulation in the county. After incorporation, draft bylaws, hold an organizational meeting, file IRS Form 1023, and apply for state-level exemptions and BCO-10 registration.
What is the minimum board size for Pennsylvania nonprofits?
One director is technically the minimum under 15 Pa.C.S. § 5723, but most 501(c)(3) public charities maintain at least three to satisfy IRS expectations and standard governance practice. Directors do not have to be Pennsylvania residents. The corporation must have a president, secretary, and treasurer; the same person can hold multiple offices except where prohibited by bylaws. Members of public charities are not required, but if members exist, the bylaws govern their voting rights.
Are there fiscal-year quirks for Pennsylvania nonprofits?
Pennsylvania's BCO-10 deadline is aligned with the federal Form 990 deadline (135 days after fiscal year end). The Decennial Report is the unusual one — every Pennsylvania business entity files a Decennial Report once every 10 years (years ending in 1) to confirm continued use of the corporate name. Pennsylvania does not require annual corporate reports as most states do. Missing the Decennial means the corporate name becomes available for others to register.
How do federal grants flow through Pennsylvania state agencies?
Major Pennsylvania pass-through agencies include the Department of Human Services (DHS) for Medicaid, SNAP, and child welfare; the Pennsylvania Department of Education (PDE); the Pennsylvania Department of Health (DOH); the Pennsylvania Department of Community and Economic Development (DCED) for HUD CDBG, workforce, and community programs; the Pennsylvania Department of Aging (PDA) for Older Americans Act; and the Pennsylvania Commission on Crime and Delinquency (PCCD) for Justice grants. The state agency is the pass-through entity under 2 CFR 200.332.
What state-funded grant programs should Pennsylvania nonprofits know?
Pennsylvania Council on the Arts grants and Pennsylvania Partners in the Arts program; Pennsylvania Historical and Museum Commission Cultural and Historical Support; DCED Keystone Communities and Multimodal Transportation Fund; DHS Human Services Development Fund (HSDF); Department of Conservation and Natural Resources Community Conservation Partnerships Program (C2P2); Pennsylvania Commission on Crime and Delinquency victim services and prevention; Pennsylvania Housing Finance Agency (PHFA) capital and operating grants. Most flow through eGrants or agency-specific portals.
Where do Pennsylvania nonprofits file annual reports?
Two main places (plus a 10-year filing). (1) IRS — Form 990, 990-EZ, or 990-N. (2) PA Bureau of Corporations and Charitable Organizations — BCO-10 plus 990 attachment and audit/review when required. (3) PA Department of State — Decennial Report every 10 years (next due in years ending in 1). Pennsylvania does not have an annual corporate report filing equivalent to Florida's, Texas's, or Ohio's. Charitable registration status is searchable at the Department of State's online portal.
What is the most common Pennsylvania nonprofit compliance mistake?
Forgetting the Decennial Report. Because the cycle is once per decade, organizations born after the most recent Decennial year often miss the next one, especially if leadership has turned over. Missing the Decennial doesn't cause administrative dissolution, but it does cause the corporate name to be released for use by others, which can be embarrassing and disruptive. Document the next Decennial year (the next year ending in 1) in the corporate calendar and governance binder.
Do Pennsylvania professional solicitors register separately?
Yes. Professional solicitors and fundraising counsel must register with the Bureau of Corporations and Charitable Organizations before soliciting in Pennsylvania under 10 P.S. § 162.6. Professional solicitors post a $25,000 surety bond. Charities contracting with a professional solicitor file the contract with the Bureau before solicitation begins. Use of a professional solicitor lowers the audit thresholds — review at $100,000 and audit at $250,000. Verify the solicitor's registration status before signing.
What are Pennsylvania's rules on raffles and small games of chance?
Pennsylvania's Local Option Small Games of Chance Act (10 P.S. § 328.101 et seq.) authorizes qualifying nonprofit organizations to conduct small games of chance — raffles, daily drawings, weekly drawings, and pull-tabs — under a county license. The license is issued by the County Treasurer or the Department of Revenue. Net proceeds must be used for public-interest purposes. Major raffles with prizes over $20,000 require a Special Raffle Permit. Bingo is licensed separately under the Pennsylvania Bingo Law.
What records must Pennsylvania nonprofits keep?
15 Pa.C.S. § 5333 requires every nonprofit corporation to keep accurate and complete records of accounts and minutes of the proceedings of incorporators, members, directors, and committees. Records are subject to inspection by directors at any reasonable time, and members have inspection rights for proper purposes. The Bureau of Corporations and Charitable Organizations may request supporting documentation for any BCO-10 filing. Standard practice: financial records for at least seven years, board minutes permanently, donor restriction documentation for the life of the restriction plus seven years.
Does the PA Right-to-Know Law apply to nonprofits?
Generally no. The Pennsylvania Right-to-Know Law (65 P.S. § 67.101 et seq.) applies to Commonwealth and local agencies. A private 501(c)(3) is not an agency. Pennsylvania courts apply a fact-specific test that considers whether the entity is performing a governmental function and the degree of public funding. Most operating charities are not subject. Organizations created by Commonwealth statute or that have governmentally-appointed boards should obtain a fact-specific legal review.
How long does Pennsylvania 501(c)(3) determination take?
501(c)(3) determination is a federal IRS process. Form 1023 typically takes 6 to 12 months; Form 1023-EZ typically takes 2 to 4 weeks. Pennsylvania state-level work — Department of State incorporation (with newspaper publication), BCO-10 registration, Department of Revenue sales-tax exemption — typically completes within 6 to 10 weeks. The newspaper publication adds 2–3 weeks. Many PA nonprofits submit BCO-10 with a pending Form 1023 and update once the IRS letter issues.
What about Philadelphia and Allegheny County-specific compliance?
Philadelphia and Allegheny County (Pittsburgh) have their own taxation and regulation. Philadelphia administers Business Income and Receipts Tax (BIRT) and Net Profits Tax with their own exempt organization rules. Both counties have separate property tax exemption procedures. The City of Philadelphia regulates door-to-door solicitation through the Department of Licenses and Inspections. Federal grants flowing through the cities carry M/WBE goals on top of federal procurement rules.
How does GrantPipe help Pennsylvania nonprofits stay compliant?
GrantPipe tracks every grant award alongside the program funds it supports, surfaces deadlines for federal pass-throughs from DHS, PDE, DOH, DCED, PDA, and PCCD, and produces audit-ready schedules for the Pennsylvania CPA review at $100,000 in contributions, audit at $250,000–$750,000, and the federal Single Audit at $1,000,000 in federal awards expended. It accommodates the unique 10-year Decennial Report cycle so the deadline is captured in the corporate calendar.
Where can I read the underlying Pennsylvania statutes and forms?
Solicitation of Funds for Charitable Purposes Act (10 P.S. § 162.1 et seq.) and Pennsylvania Nonprofit Corporation Law of 1988 (15 Pa.C.S. § 5101 et seq.) on legis.state.pa.us. Bureau of Corporations and Charitable Organizations forms at dos.pa.gov/Charities. Department of Revenue exempt organization forms at revenue.pa.gov. Department of Labor and Industry unemployment registration at uc.pa.gov. Pennsylvania Department of State business filings at dos.pa.gov.