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Welcome to our Pennsylvania nonprofit resource guide! This free guide will help you understand how to start your nonprofit in Pennsylvania and become 501(c)(3) tax exempt. You will find step-by-step instructions and get answers to common questions like "what does it cost?" and "how many board members do I need?".
If you're starting out with little or no funds, gaining professional assistance is rarely an option. In that case, you may want to commit to researching the process and filing government applications on your own. This route is not for the faint of heart but is certainly achievable if you work diligently. The following step-by-step guide should help you as you undertake this process.
As you begin, take a moment to consider if you should start a new non-profit organization. According to the National Center for Charitable Statistics, there were over 68,000 nonprofit organizations in Pennsylvania in 2009. To decide if a new nonprofit is necessary...
This guide focuses on starting a nonprofit corporation, the traditional nonprofit legal structure. This legal structure has a few key benefits. First and foremost, the nonprofit corporation limits the liability of the organization's officers and directors. Second, the nonprofit corporation is familiar to donors and grant makers. Lastly, nonprofit corporations meet a wide range of IRS eligibility requirements, in particular those relating to the 501(c)(3) application.
The legal name of your nonprofit corporation may not conflict with any other registered name. Check availability of your desired name by conducting a name search.
Identify the nonprofit’s Pennsylvania registered agent. A registered agent is a legal appointee who is responsible for receiving legal notices for your nonprofit. Your registered agent must be physically located in Pennsylvania and maintain an office that is open during regular business hours.
We provide a convenient service to act as your Pennsylvania registered agent. As part of that service, our local office in Lancaster, PA receives your legal documents and sends you notifications. You view your documents in your secure online account. Registered agent is included in our nonprofit formation service or you can sign up for this service separately.
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Below is an overview of the paperwork, cost, and time to start an Pennsylvania nonprofit.
File articles of incorporation to create your non-profit corporation.
|Agency:||Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations|
Mail or using Online Business Registration Interview (OBRI)
~5-10 business days.
The IRS requires specific language in the articles of incorporation to qualify for 501(c)(3) federal tax exemption. These provisions are not always included in state articles of incorporation templates. Refer to IRS Pub 557 for guidance and sample language.
Section 1307 of the BCL (relating to advertisement) requires that the incorporators advertise their intention to file, or the corporation advertise the filing of, articles of incorporation with the Department one time in two newspapers published in the English language, one of which shall be a newspaper of general circulation, and the other the legal newspaper, if any, designated by the rules of the court for the publication of legal notices, otherwise, in two newspapers of general circulation, published in the county in which the initial registered office of the corporation is to be located.
Your filed articles of incorporation and publishing affidavits are the first documents for your nonprofit
corporate records. Your corporation will generate many other official records such as bylaws, meeting
minutes, and your EIN.
Office supplies intended for a nonprofit corporation will help you stay organized and save time. Optionally, get a nonprofit records kit.
Draft bylaws which is the governing document for the nonprofit. You should "The bylaws may contain any provisions for managing the business and regulating the affairs of the corporation not inconsistent with law or the articles." (15 Pa.C.S. §5504). You will review and ratify the bylaws at your first board of directors meeting.
The Board should create and adopt a conflict of interest policy. This document is submitted to the IRS at the time they apply for 501(c)(3) tax exemption.
Hold the first meeting of the board of directors in compliance with 15 Pa.C.S. §5310. At this meeting, the nonprofit should approve the bylaws, elect additional directors, appoint officers, and approve initial resolutions such as opening a company bank account. In Pennsylvania, every corporation must have a president, a secretary and a treasurer (15 Pa.C.S. §5732). Keep minutes of this meeting.
Your nonprofit must obtain an EIN regardless of whether it will hire employees.
|Agency:||Internal Revenue Service (IRS)|
Mail, phone, fax, or online
Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail.
The IRS website is only available during certain hours. Print your EIN before closing your session.
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.
Applying for 501(c) tax exemption is often the most complex and time-consuming steps in setting up a nonprofit. It is also one of the most important, as obtaining a tax exemption is what is enables an organization to successfully raise funds, apply for grants, be exempt from IRS income tax, and enjoy a variety of other benefits exclusively available to nonprofits.
501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Most nonprofits are 501(c)(3)s, including charities and foundations. There are a few forms used to apply for federal tax exemption. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Not all organizations however are eligible to file the streamlined Form 1023-EZ. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024.
Seeking the help of a professional with this step is common. Choosing the right form to file is just one consideration. A great deal of expertise, time, and preparation goes into creating a successful application. The IRS estimates over 100 hours are spent on researching and preparing the application. If you're looking for professional assistance, check out our formation services to help you with your 501(c) application and the rest of the process. Our nonprofit specialists will help you from start to finish.
|Agency:||Internal Revenue Service (IRS)|
$275, $400, or $850, depending on form and annual gross receipts
1023-EZ average: <1 month. 1023 average: 3-6 months.
The IRS will return a Determination Letter which officially recognized your exemption.
To file to obtain Sales Tax Exemption:
|Agency:||Pennsylvania Department of Revenue|
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|
Before soliciting donations or hiring professionals solicitors, you must register in each state where you will raise funds.
To file in Pennsylvania:
|Agency:||Pennsylvania Department of State - Bureau of Charitable Organizations|
If your nonprofit is soliciting contributions from Pennsylvania residents, it must register unless it meets one of the exemptions. The most common exemptions are:
For the full list of exemptions, please see Pennsylvania’s exclusions or exemptions chart. Note that if your organization is based in Pennsylvania, it may still be required to file an Institutions of Purely Public Charity Statement.
$15-250, depending on gross contributions
10 Pennsylvania Statutes, Chapter 4B, § 162.1 - 162.7
Yes, Pennsylvania charitable organizations must keep records as required by 10 P.S. § 162.12. Records are open to inspection by the Attorney General but generally closed to public inspection. Retain records for 3 years.
Pennsylvania follows the Charleston Principles regarding when your nonprofit needs to register due to online fundraising.
To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.
To run your business legally, you must obtain applicable licenses and permits. The easiest way to navigate the wide range of federal, state, and local requirements is to search by your business type and locality using the Small Business Administration Business License & Permit look-up tool.
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.
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!
Download the case study of how our client, Reform It Now, obtained 501(c)(3) tax exemption in only two weeks using the new IRS Form 1023-EZ!
Filing fees depend on your individual situation. We do our best to calculate your filing fees upfront and collect those fees today so we can get started. Your specialist will determine your exact filing fees and invoice additional fees if required.
Government fees paid separately may incur a 3% convenience charge.