Pennsylvania Registration Requirements For Charities Asking For Donations
Updated: January 28, 2020
Solicitation of Funds for Charitable Purposes Act
Fundraising is a central activity of many nonprofit organizations. These funds are necessary for operations, service delivery, and mission accomplishment. That being said, your organization review the Pennsylvania Solicitation of Funds for Charitable Purposes if it solicits charitable contributions. (Solicit is a fancy, lawyerly way of saying you ask for donations). This law applies to you whether you raise funds by phone, mail, website, or standing outside your local grocery store with a donation jar.
This Solicitation of Funds for Charitable Purpose Act requires many organizations that solicit charitable funds from Pennsylvania residents to register with the Commonwealth of Pennsylvania Department of State. After registering, the public can view your information and learn the following information about your charity:
- Who is asking for the donation? Is it your organization’s staff and volunteers? Are you paying someone to do it for you?
- How you will actually use the funds? Will the donations be used mostly for charitable purposes or will a paid professioanl fundraiser get most of it?
We ask for donations. Do we have to register with Pennsylvania?
Charities that receive more than $25,000 in gross national contributions and that solicit funds from Pennsylvania residents must register with Pennsylvania’s Department of State (there are some exemptions, noted below). This is true regardless of your charity’s “home” state. For example, if your charity is based in New York but you ask for donations from Pennsylvania residents, you must register if your donations reach the $25,000 threshold.
The law also applies to entities that hire professional solicitors. In other words, if you pay another person or business to make telemarketing donation requests, send our donation request mail or otherwise raise money on your behalf, those persons or bsuinesses are “professional solicitors”.
Some entities are exempt from registration, such as certain hospitals, educational organizations, veterans organizations, fire & ambulance organizations, and many others. It is important to carefully read the law or consult with an attorney before determining that your organization is, in fact, exempt from registration.
How do we register?
Registration is fairly simple. Your organization must complete and submit a Charitable Organization Registration Statement. The Registration Statement identifies basic organizational information (i.e. name, address, board of directors, fiscal year). It also asks for infomration about the professional fundraiser and a description of how the funds will be used. The state has an interest in informing the public whether they money donated goes to the charity or to the paid professional fundraiser.
Registering entities must also submit financial information about their organization. Small organizations can rely upon internally-prepared financial statements but larger organizations – those receiving more than $50,000 in gross contributions — must have an independent review or audit of its finances.
Do not ignore this law or procrastinate in filing! Failure to register can result in civil and criminal penalties. Registration is such an easy process. You do not want to jeopardize your nonprofit organization or your reputation by failing to submit the appropriate paperwork. The filing fee is minimal and certainly is less than the penalty for failing to register.