Harrisburg, PA – The Pennsylvania Senate today passed Senate Bill 1183, legislation sponsored by Senators Nick Pisciottano (D-Allegheny) and Lynda Schlegel Culver (R-Columbia, Luzerne, Montour, Northumberland, Snyder) to update financial reporting requirements for nonprofit organizations registered under the Solicitation of Funds for Charitable Purposes Act.
The bill raises the thresholds that determine when charitable organizations must obtain an audit, review, or compilation of their financial statements from an independent certified public accountant. Pennsylvania’s current thresholds have not been updated since 2017.
“Pennsylvania’s charitable reporting thresholds have not been updated in almost a decade, so it’s time for us to ensure the requirements reflect current standards and realities,” said Senator Pisciottano. “This legislation helps to reduce burdens on nonprofits, as well as on certified public accountants at a time when the profession is facing shortages.”
Senate Bill 1183 would update the annual contribution thresholds as follows:
- Organizations receiving $1 million or more in annual contributions would be required to obtain an audit, an increase from the current threshold of $750,000.
- Organizations receiving between $500,000 and $1 million in annual contributions would be required to obtain a review or audit, an increase from the current threshold of $250,000 to $750,000.
- Organizations receiving between $150,000 and $500,000 would be required to obtain a compilation, review, or audit, an increase from the current threshold of $100,000 to $250,000.
- Organizations receiving less than $150,000 in annual contributions would not be required to obtain a compilation, review, or audit, an increase from the current threshold of $100,000.
“State reporting requirements for charities should be designed to ensure transparency and protect donors in a manner that doesn’t impose an unnecessary burden that detracts from the charity’s mission,” Senator Culver said. “Nonprofits are critical to the delivery of services and assistance in our communities and this legislation updates reporting requirements so that they’re clear, reasonable and aligned with today’s costs.”
The updated thresholds would provide nonprofit organizations with a financial reporting framework that is more closely aligned with federal requirements while maintaining transparency and accountability. The legislation would also help address workforce challenges facing the accounting profession by reducing unnecessary reporting burdens.
The bill is supported by the Pennsylvania Institute of Certified Public Accountants and the Pennsylvania Association of Nonprofit Organizations. It now heads to the House of Representatives for consideration.