How to Start a Nonprofit in Pennsylvania

1. Name Your Organization

   Your organization’s name establishes its brand and is also important for incorporating with the state. The legal name of your nonprofit corporation may not conflict with any other organization registered in the state. Make sure the name is available and meets state requirements.

   Name Search:	Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations Name search
   Suffix:	Not required.  Pennsylvania Code Title 15 &sect203

2. Recruit Incorporators and Initial Directors

   The incorporator is the person who signs the Articles of Incorporation for your nonprofit. You will need at least one, but can have more than one. Directors make up the governing body of your nonprofit corporation and are stakeholders in your organization’s purpose and success. You’ll want to identify three, unrelated individuals to meet IRS requirements. You will also want to be aware of any age or residency requirements.

   Pennsylvania director requirements:	Number: minimum 1; default 3 Qualifications: Natural person of full age (some exceptions). No residency requirement. No membership requirement. Term: 1 year Quorum: majority Committee: minimum 1 director
   Pennsylvania officer requirements:	A president, a secretary, and a treasurer are required. The president and secretary must be natural persons of full age. The treasurer may be a corporation or a natural person of full age. Two or more offices may be held by the same individual.

3. Appoint a Registered Agent

   A registered agent is responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours. As a nationwide registered agent, our service is designed to receive your legal documents and provide secure access to those documents through your online account. Our local Pennsylvania registered agent office is located in Lancaster, PA. We offer registered agent service independently or as part of our nonprofit formation packages.

4. Prepare and File Articles of Incorporation

   Your nonprofit’s articles of incorporation officially mark the creation of your organization. They document where and when the organization was formed and capture other information necessary to verify its existence. While requirements for language vary from state-to-state, there are some basic provisions that the IRS will look for when you apply for 501(c)(3) exemption. It is important to customize the articles for your organization and make sure you meet the state and IRS requirements. Meeting these requirements from the start will help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states will also require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.

   Agency:	Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations
   Form:	Articles of Incorporation
   Filing Method:	Mail or online.
   Agency Fee:	$125
   Turnaround:	~5-10 business days.
   Law:	15 Pa.C.S. Subpart C
   Notes:	You need to file a PA docketing statement with your articles. The $125 articles of incorporation fee is waived for veterans. Filers requesting a veteran/reservist-owned small business fee exemption should attach proof of the veteran’s or reservist’s status to the Articles of Incorporation form when submitted.

5. Publish Incorporation

   Pennsylvania domestic corporations must publish filing of the articles of incorporation in two newspapers of general circulation, one of which must be a legal newspaper. Both publications must be in the county of your registered agent. We recommend publishing only after the articles of incorporation are approved, though you may also publish prior to filing.

6. File Initial Report

   After filing articles of incorporation, you must file an initial report.

   Not required

   
   
   

7. Obtain an Employer Identification Number (EIN)

   This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.

   Agency:	Internal Revenue Service (IRS)
   Form:	IRS Form SS-4
   Filing Method:	Mail, phone, fax, or online.
   IRS fee:	$0
   Turnaround:	Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail.
   Notes:	The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, see IRS Pub 1635: Understanding Your EIN.

8. Store Nonprofit Records

   As you launch your nonprofit, you will receive a number of official documents. Organizing these documents in one place will save you headaches down the road. You will soon have numerous items to keep in your records including your EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, and more.

   
   
   

   A great way to maintain necessary documentation is Records Manager, our software for storing records securely, tracking directors and officers, and getting notified of meetings.

9. Establish Initial Governing Documents and Policies

   Your bylaws are the governing document for your nonprofit. They serve as your organization’s operating manual and should be consistent with your articles of incorporation and the law. When your Board of Directors meets for the first time, you’ll review and ratify the bylaws and they will be a roadmap for governance from there.

   At the same time, you’ll also want to create and adopt a conflict of interest policy. A conflict of interest is when someone in a key position in your nonprofit has competing interests and is making choices that could benefit themselves to the harm of the organization. Personal interests should be set aside and organizational interests prioritized. If a conflict of interest does arise, it should be disclosed immediately.

   Your application to the IRS for 501(c)(3) exemption will require that both the bylaws and the conflict of interest policy are approved and adopted. Once they’ve been adopted, safely store them in your Nonprofit Records Kit.

10. Hold Organizational Meeting of the Board of Directors

    The initial organizational meeting of your Board of Directors will be incredibly productive. At this meeting you will approve the bylaws, adopt the conflict of interest policy, elect directors, appoint officers, and approve resolutions such as opening the organization’s bank account. Important decisions are being made so be sure to record them in the meeting minutes.

11. Get Pennsylvania State Tax Identification Numbers/Accounts

    Pennsylvania issues multiple tax IDs - one for each tax account number (box number). For example, if your business sells candy bars and has employees, you will have separate tax account numbers for sales tax and employer withholding tax.

    Submit to:	Pennsylvania Department of Revenue www.revenue.state.pa.us/
    Form:	PA-100: PA Enterprise Registration Form
    Guidance:	REV-558: Starting a Business in Pennsylvania - A Beginner's Guide
    Fee:	$0 + fees for needed licenses
    Filing Method:	Mail or using Online Business Registration Interview (OBRI)
    Notes:	The section of the PA-100 that discusses sales tax exemption only results in an application (REV-72) being mailed to you.

    More information on PA-100

12. Apply for 501(c)

    Applying for 501(c) tax exemption can feel like the most daunting step in bringing your nonprofit dream into reality, but obtaining tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.

    Completing the federal application for tax exemption is significantly easier with the assistance and support of a professional. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey - from start to tax-exempt finish!

    Agency:	Internal Revenue Service (IRS)
    Form:	IRS Form 1023, IRS Form 1023-EZ, or IRS Form 1024
    Instructions:	IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024.  Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization.
    Filing Method:	Mail
    Agency Fee:	$275 for organizations filing Form 1023-EZ and $600 for organizations filing Form 1023.
    Turnaround:	1023-EZ average: <1 month. 1023 average: 3-6 months.

    

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13. Apply for State Tax Exemption(s)

    With your IRS Determination Letter in hand, make sure you familiarize yourself with your state’s requirements for recognizing your nonprofit’s tax-exempt status. This is an area where requirements vary state-by-state. Many states issue their own tax-exempt certificate that can be used for sales and use tax purposes, but it may require application and periodic renewal.

    To file to obtain exemption from state income tax:

    Not required

    
    
    

    Upon obtaining your IRS Determination Letter, your organization is automatically exempt from Pennsylvania corporate income tax. No application or notification is necessary.

    More information: Pennsylvania Department of Revenue

    To file to obtain Sales Tax Exemption:

    Agency:	Pennsylvania Department of Revenue
    Form:	Form REV-72: Application for Sales Tax Exemption
    Agency Fee:	$0
    Due:	Once every five years. Approximately 2 months before an organization's sales tax exemption expires, the Department of Revenue will send a renewal packet to the organization.
    Law:	Institutions of purely public Charity Act of 1997

14. Register for Charitable Solicitation (Fundraising)

    This is another area where laws differ from state to state, but most states require any nonprofit soliciting donations to register to do so on an annual basis. This means registering in the state prior to soliciting any resident of that state. Registering in your home state is essential, but you may also need to register other states depending on the scope of your organization.

    Pennsylvania Charitable Organization Registration

    Agency:	Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations - Charities Section
    Law:	10 Pennsylvania Statutes, Chapter 4B, § 162.1 - 162.7
    Foreign Qualification is Prerequisite:	No
    Registered Agent (Special Agency) Required?	No

    One-Time Exemption Registration

    More Details

    Exemption Eligible Organizations:	Any charitable organization which receives contributions of $25,000 or less annually, provided that such organization does not compensate any person who conducts solicitations Educational institutions, the curricula of which in whole or in part are registered with or approved by the Department of Education, either directly or by acceptance of accreditation by an accrediting body recognized by the Department of Education, and any auxiliary associations, foundations and support groups which are directly responsible to educational institutions Hospitals which are subject to regulation by the Department of Health or the Department of Public Welfare and the hospital foundation, if any, which is an integral part thereof A local post, camp, chapter or similarly designated element or a county unit of such elements of any veterans' organization chartered under Federal law and any service foundation recognized in the bylaws of such organization; a bona fide organization of volunteer firemen; a bona fide ambulance association; a bona fide rescue squad association; or a bona fide auxiliary or affiliate of any of the above mentioned organizations (provided that all fundraising activities are carried on by volunteers, members or an auxiliary or affiliate thereof, and those volunteers, members or affiliates receive no compensation directly or indirectly for the fundraising activities) Public nonprofit library organizations which receive financial aid from State and municipal governments and file an annual fiscal report with the State Library System Senior citizen centers and nursing homes which are nonprofit and charitable and which have been granted tax-exempt status under the Internal Revenue Code of 1986 provided that all fundraising activities are carried on by volunteers, members or officers of the Senior Citizen Center and those volunteers, members or officers receive no compensation, directly or indirectly, for the fundraising activities Bona fide parent/teacher associations or parent/teacher organizations as recognized in a notarized letter from the school district in which they are located Any corporation established by an act of Congress of the United States that is required by Federal law to submit annual reports of its activities to Congress containing itemized accounts of all receipts and expenditures after being fully audited by the Department of Defense
    Form:	Form BCO-9: Request for Approval of Exemption/Exclusion
    Agency Fee:	$0
    Law:	10 PA Stat § 162.6
    Notes:	If your organization is based in Pennsylvania, it may still be required to file an Institutions of Purely Public Charity Statement.

    Initial Registration

    More Details

    Form:	Form BCO-10: Charitable Organization Registration Statement
    Instructions:	Instructions for Registering
    Filing Method:	Mail or online.
    Agency Fee:	$15-250, depending on gross contributions
    Turnaround:	2-3 weeks
    Notes:	Read the exemptions chart carefully and check to see if you still need to file the Institutions of Purely Public Charity Statement. Some Pennsylvania counties and municipalities may require charities that solicit in-person to register prior to fundraising.
    Before you Apply:	All Applicants: Check the available exemptions to see if your charity is eligible for exemption from the full registration requirement. If your charity meets the audit threshold, obtain an audited financial report to submit with your registration application.
    How to Apply:	Domestic Applicants: File entity formation documents with the Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations. Submit a Charitable Organization Registration Statement and all required attachments to the Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations - Charities Section. Foreign Applicants: Determine whether or not your charity will need to foreign qualify based on your activity in Pennsylvania. If not required, skip to number 3. File foreign qualification documents with the Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations. Submit a Charitable Organization Registration Statement and all required attachments to the Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations - Charities Section.
    Required Attachments:	IRS form 990 Audited financials (if applicable) Articles of incorporation Bylaws IRS determination letter List of officers and directors Professional fundraising contracts List of other states where registered to solicit

    Registration Renewal

    More Details

    Form:	Form BCO-10: Charitable Organization Registration Statement (Renewal)
    Filing Method:	Mail or online.
    Agency Fee:	$15-250, depending on gross contributions
    Due:	Annually within 10.5 months after the end of the organization's fiscal year. There is no official start to the renewal period, so renewals may be submitted as soon as financials become available for the most recently completed fiscal year.
    Due Date Extension:	No extensions are available for charitable registration due dates.
    Penalties:	An organization failing to file a registration by the due date must pay an additional fee of $25 for each calendar month or part of a month after the date on which the registration was due to be filed.
    Notes:	The renewal due date is indicated on the certificate of registration you receive after your initial filing. You must attach an annual financial report.
    Required Attachments:	IRS form 990 Audited financials (if applicable) List of officers and directors Professional fundraising contracts Only if amended: IRS determination letter, articles of incorporation, and bylaws List of other states where registered to solicit

    Change of Fiscal Year

    More Details

    Form:	Form BCO-10: Charitable Organization Registration Statement
    Agency Fee:	Varies
    Notes:	Fiscal year can be changed during the standard renewal process.

    Cancellation

    More Details

    Form:	Form BCO-2: Non-Renewal Form
    Agency Fee:	$0
    Notes:	To close out your registration, file a non-renewal form with any required attachments.

    Pennsylvania Institution of Purely Public Charity Registration

    Agency:	Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations - Charities Section
    Law:	10 P.S. § 371. et seq.
    Notes:	Organizations that are not required to register under the Solicitation of Funds for Charitable Purposes Act but meet the definition of a purely public charity, as defined in The Institutions of Purely Public Charity Act, should register as an institution of public charity instead of registering as a charitable organization.

    Registration to Obtain Exemption

    More Details

    Exemption Eligible Organizations:	Bona fide duly constituted religious institutions and such separate groups or corporations which form an integral part of a religious institution and are exempt from filing an annual IRS 990 Return An institution of purely public charity which receives contributions of less than $25,000 per year provided that the institution's program service revenue does not equal or exceed $5,000,000
    Form:	Purely Public Charity Registration Statement (Exemption)
    Filing Method:	Mail
    Agency Fee:	$0

    Renewal to Maintain Exemption

    More Details

    Exemption Eligible Organizations:	Bona fide duly constituted religious institutions and such separate groups or corporations which form an integral part of a religious institution and are exempt from filing an annual IRS 990 Return An institution of purely public charity which receives contributions of less than $25,000 per year provided that the institution's program service revenue does not equal or exceed $5,000,000
    Form:	Purely Public Charity Registration Statement (Exemption Renewal)
    Filing Method:	Mail
    Agency Fee:	$0
    Due:	Annually within 135 days of the organization's fiscal year end. The due date is May 15th for organizations with a fiscal year end date of December 31.

    Initial Registration

    More Details

    Form:	Purely Public Charity Registration Statement
    Filing Method:	Mail
    Agency Fee:	$15
    Required Attachments:	IRS form 990

    Registration Renewal

    More Details

    Form:	Purely Public Charity Registration Statement (Renewal)
    Filing Method:	Mail
    Agency Fee:	$15
    Due:	Annually within 135 days of the organization's fiscal year end. The due date is May 15th for organizations with a fiscal year end date of December 31.
    Required Attachments:	IRS form 990

    To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.

15. Obtain Other Business Licenses & Permits

    Running your nonprofit corporation legally also means securing all applicable licenses and permits. The range of local, state, and federal requirements is wide. Access resources like the Small Business Administration Business License & Permit look-up tool and search by your business type and locality.

    Pennsylvania allows qualified charities to conduct Bingo, punchboards, daily drawings, raffles and pull-tabs. Other gambling games, specifically slot machines and video poker, are not permissible.

    Law:	Pennsylvania Charitable Gaming Law
    More information:	Pennsylvania Gaming Control Board http://gamingcontrolboard.pa.gov/ or your county.
    Form/Fee/Filing:	Varies by county.
    See also:	IRS Pub 3079: Tax-Exempt Organizations and Gaming

You’ve made it! You turned your passion into a legitimate nonprofit corporation exempt under IRS 501(c) and are benefiting your community. That solid foundation on which you built your organization requires ongoing maintenance. Investing in maintaining compliance with all of the government agencies is an ongoing responsibility and commitment needed to ensure your vision continues long into the future. Check out our compliance guide to learn more!

Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our Pennsylvania nonprofit compliance guide to learn more!

Continue reading "Pennsylvania Nonprofit Compliance"

Harbor Compliance® proudly partners with the Pennsylvania Association of Nonprofit Organizations to provide insightful resources and compliance solutions to nonprofits in Pennsylvania.

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