FAQ: Charitable Organization Registrations in PA

What does “soliciting donations” mean?

Non-profit organizations that ask the public for money are charitably soliciting. It doesn’t matter if you are asking one person, a group of people, or just asking the public at large. This covers activities such as raffles, fund drives, applying for grants, donation jars, social media posts, and more.

What do nonprofits have to do to legally ask for money?

First, nonprofits must be a legally organized non-profit organization. Second, you have to look up the regulations for each state in which  you plan to ask for money as each state has different rules. Many have reciprocity rules or forgiveness for inadvertent activities (eg. a donor asking a relative in a different state not initiated by the non-profit). Florida is notable for not having any reciprocity laws and being rather pricey to register in, something to consider when asking ‘snowbirds’ for funding.

Additional registrations are required for professional solicitors, so if you hire one be careful to ensure they are properly registered.

How can I find out if I am a legally organized non-profit in Pennsylvania?

You can search the registered businesses on the State website at https://file.dos.pa.gov/search/business. If you are not listed, you are likely not legally organized in Pennsylvania – even if you have a 501c3 with the Federal government.
To form a nonprofit corporation in Pennsylvania, you must file your Articles of Incorporation online with the Bureau of Corporations and Charitable Organizations. Please see the Bureau’s Registration Forms page, for detailed information about the application (look for forms Articles of Incorporation – Nonprofit:DSCB:15-5306/7102); the cost is $125.

Articles of Incorporation are not required by law to be prepared by an attorney. However, because of complex legal issues involved when starting any business, including tax considerations, it is advisable to seek legal counsel before filing to assure that all legal consequences receive proper consideration.

Cut to the chase – what’s the deal in Pennsylvania?

The law that governs charitable solicitation in PA is called  “The Solicitation of Funds for Charitable Purposes Act”.

The SFCPA has many exclusions and exemptions built into the law. The full list can be found here; notably, public libraries receiving state aid and filing the annual report with the Office of Commonwealth Libraries are exempt under this law. (The form for organizations to register under the SFCPA is the BC-10, and you may see references to BC-10 rather than the law’s full name.) If you fall under the exemptions in the law, you do not have to file the BC-10 to legally solicit donations. 

Beware: there are additional laws that come into play if you ask for donations using small games of chance (raffles, pull tabs, 50/50s, etc).

Is Charitable Solicitation registration the only thing I have to worry about?

No! There is another law in PA which applies to nonprofit organizations called “The Institutions of Purely Public Charity Act“ (IPPC). It governs tax exemptions, in particular the eligibility for property taxes, and works to apply consistency to the recognition of tax-exempt status in the Commonwealth.

The IPPC only has three exemptions for registration built in. The exemptions are: 

1. An organization that registers with the Department of State under the Solicitation of Funds for Charitable Purposes Act. 
2. A bona fide duly constituted religious institution and such separate groups or corporations which form an integral part of a religious institution and are exempt from filing an annual return pursuant to the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).   
3. 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.

What counts as a contribution?

• A contribution is the donation of funds or service.
• Fines, fees, and charges for services are not considered contributions unless they would be considered to confer membership rights. (For example: membership fee for a Friends group counts, but a fee for materials for a program would not.)
• Income from endowments owned by the organization would not count as a contribution. (Endowment contributions are only counted in the year the organization receives the initial contribution.)
• Government funding may or may not count depending on which law your organization is looking at. For example, the The Solicitation of Funds for Charitable Purposes Act explicitly excludes government grants and subsidies.

When in doubt, use the number on Line 8 of your organization’s 990.