On December 22, 2017 the Governor of Pennsylvania signed two bills into law amending the Solicitation of Funds for Charitable Purposes Act. The new laws go into effect February 20, 2018.
Act 71: Under prior law, Pennsylvania required registered charities with gross annual contributions of $300,000 more to have an independent CPA audit the organization’s financial records. This was one of the lowest audit thresholds in the country. The new law does not require an independent audit until the registered charity’s gross annual contributions meet or exceed $750,000. This will save many small charities thousands of dollars in audit fees that would not otherwise incur. Still, the higher threshold for independent audits does not mean that registered charities do not have to submit financial information. The new thresholds and requirements for financial reports required for charities registered to fundraise in Pennsylvania are as follows:
|Less than $100,000: internally prepared, compilation, review, or audit|
|$100,000 to less than $250,000: compilation, review or audit|
|$250,000 to less than $750,000: review or audit|
|$750,000 or more: independent audit|
Act 72: To help charitable organizations comply with registration deadlines and, possibly, eliminate late filing fees, the annual registration statement will be considered timely filed if the renewal is postmarked on or before the deadline rather than by the date received by the Bureau. This aligns the Bureau’s filing requirements with the “mailbox rule” followed by the IRS and most other regulators.
This Act also provides the Bureau with more time to review and process registration filings submitted by charities, solicitors and fundraising counsels. The number of days the Bureau has to review the filings has increased from 10 to 15.
Both laws will be applied to all registration renewals due February 15, 2018 and thereafter beginning with organizations whose fiscal year ended 3/31/2017 and has not yet refiled with the Bureau. For organizations that are filing an initial application, the changes will apply for organizations that file on or after February 20, 2018.
Lastly, the Bureau revised the Charitable Organization Registration Statement and the Instructions. Check the website (http://www.dos.pa.gov/BusinessCharities/Charities/Pages/default.aspx) for the August 2017 revised form which promises to be shorter and more user-friendly.