Senate approves bill to update nonprofit reporting requirements

Sponsored by two local senators, the bill received unanimous support.

The state Senate unanimously passed a bill Monday that would update financial reporting requirements for nonprofit organizations registered under the Solicitation of Funds for Charitable Purposes Act.

Senate Bill 1183 was sponsored by state Sens. Nick Pisciottano, D-West Mifflin, and Lynda Schlegel Culver, R-Columbia, and passed by unanimous support from both Democrats and Republicans. The legislation was also co-sponsored by state Sen. Patrick Stefano, R-Bullskin Township.

According to a statement from Pisciottano, the legislation would raise the thresholds that determine when charitable organizations must obtain an audit, review, or compilation of their financial statements from an independent certified public accountant.

Pisciottano noted that 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,” Pisciottano said. “This legislation helps to reduce burdens on nonprofits, as well as on certified public accountants at a time when the profession is facing shortages.”

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 contrib utions 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,” 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.”

Pisciottano stated that the updated reporting requirements would be more in line with federal financial reporting standards. He added that the bill could also benefit the accounting profession by lowering reporting burdens.

SB 1183 will now move to the state House for further consideration.