HARRISBURG – The Senate today approved bipartisan legislation sponsored by Sen. Lynda Schlegel Culver (R-27) and Sen. Nick Pisciottano (D-45) to update charitable financial reporting requirements to better reflect the resources of nonprofits.
Senate Bill 1183 would update the level of financial review required for charitable organizations based on the amount of annual contributions they receive. The thresholds have not been updated since 2017.
“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,” 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.”
Under the measure, charitable organizations that receive annual contributions of $1 million or more would be required to obtain an audit by an independent CPA, an increase from the current $750,000 threshold.
Organizations receiving at least $500,000 but less than $1 million would have the option to obtain either a review or an audit, a change from the current range of $250,000-$750,000.
Charitable organizations receiving at least $150,000 but less than $500,000 would have the option to obtain a compilation, review, or audit, compared to the current range of $100,000-$250,000.
Organizations receiving less than $150,000 in annual contributions would not be required to obtain a compilation, review, or audit, compared to the current threshold of less than $100,000.
“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.”
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.
CONTACT: Erin Marsicano (Culver)
Phillip Toney (Pisciottano)