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Pennsylvania requires charitable organizations to provide progressively stronger financial reporting as their fundraising activity increases. Once a registered charity receives $750,000 or more in annual contributions, its financial report generally must be audited by an independent Certified Public Accountant or public accountant. (10 P.S. § 162.5(f); Pennsylvania Department of State, Information for Charitable Organizations)

The requirement is administered by the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations, commonly referred to as the BCCO. Organizations subject to the Solicitation of Funds for Charitable Purposes Act generally file a Charitable Organization Registration Statement, Form BCO-10, together with their tax return, required financial statements, and applicable registration fee. (Pennsylvania Department of State, Information for Charitable Organizations; BCO-10 Instructions)

A critical Pennsylvania-specific detail is that the threshold is not based on total revenue. It is based on gross annual contributions, and the state generally looks at contributions received from all sources nationwide—not only money raised within Pennsylvania. (BCO-10 Instructions)

Whether your organization operates in Philadelphia, Pittsburgh, Harrisburg, Allentown, Erie, Lancaster, Scranton, or elsewhere in the Commonwealth, monitoring the correct contribution figure can help prevent a late audit or incomplete charity renewal.

Pennsylvania Audit Requirements at a Glance

Pennsylvania’s current official guidance requires an audit at $750,000 or more, permits either a review or audit from $250,000 to less than $750,000, and permits a compilation, review, or audit from $100,000 to less than $250,000. Organizations below $100,000 may use internally prepared statements; a CPA compilation, review, or audit is optional. (10 P.S. § 162.5(f); Pennsylvania Department of State, Information for Charitable Organizations)

Quick Answer

A Pennsylvania charitable organization that receives $750,000 or more in gross annual contributions generally must submit audited financial statements prepared by an independent licensed CPA or public accountant. (10 P.S. § 162.5(f))

The audited statements ordinarily accompany the organization’s BCO-10 registration or renewal filing with the Pennsylvania Department of State. (Pennsylvania Department of State, Information for Charitable Organizations; BCO-10 Instructions)

When Does Pennsylvania Require a Nonprofit Audit?

Pennsylvania uses the following financial reporting levels:

At the highest level, the financial report must be audited by an independent CPA or public accountant. Reviews and audits must also be performed by an appropriately licensed, independent professional. (10 P.S. § 162.5(f))

This graduated structure makes year-end monitoring especially important. A charity that expected to remain below $750,000 may cross the threshold because of a successful appeal, special event, capital campaign, or major gift received late in the fiscal year.

Pennsylvania Uses Contributions—not Total Revenue

The Pennsylvania audit threshold should not be calculated using total organizational revenue.

A nonprofit might report more than $750,000 in total revenue and still need to separately determine whether its gross annual contributions meet the statutory audit threshold. Conversely, an organization with limited earned income but substantial fundraising receipts may be required to obtain an audit.

Pennsylvania’s Solicitation Act defines a contribution broadly to include money, property, financial assistance, and other things of value received in response to a solicitation. The definition can also include amounts received through certain fundraising performances, events, or sales. Volunteer services are excluded. (10 P.S. § 162.2)

This distinction makes the Pennsylvania calculation more detailed than simply copying total revenue from an income statement.

Gross Contributions Are Measured Nationwide

Another important Pennsylvania-specific rule is that the BCCO generally looks at the organization’s total national contributions from all sources for the immediately preceding fiscal year. (BCO-10 Instructions)

The threshold is not limited to:

• Donations from Pennsylvania residents
• Fundraising conducted inside Pennsylvania
• Revenue from Pennsylvania programs
• Contributions deposited into a Pennsylvania account

According to the current BCO-10 instructions, gross annual contributions are based on national contribution activity. For organizations filing IRS Form 990, Pennsylvania directs filers to specific contribution and fundraising lines when calculating the amount. (BCO-10 Instructions)

This is particularly important for national charities that solicit in Pennsylvania but conduct most of their operations elsewhere.

Are Government Grants Included?

Under Pennsylvania’s Solicitation of Funds for Charitable Purposes Act, government grants and government contracts are not treated as contributions for purposes of the statutory definition. (10 P.S. § 162.2)

Therefore, a nonprofit with substantial federal, state, or local government funding should not automatically assume that all of that funding counts toward the $750,000 contribution threshold.

Private foundation grants, corporate grants, individual gifts, special-event proceeds, and other fundraising receipts may require different treatment. Organizations near the threshold should reconcile their calculation to the appropriate Form 990 or Pennsylvania public-disclosure lines rather than relying only on the general ledger’s total grant revenue.

Form BCO-10 and Pennsylvania Charity Renewal

Charitable organizations soliciting contributions from Pennsylvania residents generally register by filing Form BCO-10, unless an exclusion or exemption applies. The form is used for both initial registration and annual renewal. (Pennsylvania Department of State, Information for Charitable Organizations; BCO-10 Instructions)

A renewal filing commonly includes:

• Completed Form BCO-10
• IRS Form 990, 990-EZ, or 990-PF, as applicable
• Form BCO-23 when required
• Internally prepared, compiled, reviewed, or audited financial statements
• Registration fee
• Any other required supporting documentation

Organizations that file Form 990-N, or that are otherwise not required to submit a full Form 990, may need to provide Pennsylvania’s BCO-23 Public Disclosure Form. The Department’s current guidance also identifies certain 990-EZ, 990-PF, and group-return filers that must include BCO-23. (Pennsylvania Department of State, Information for Charitable Organizations)

Pennsylvania currently provides the maximum renewal extension automatically when registration is approved, so organizations generally do not submit a separate BCO-10 extension request. The renewal date shown on the registration certificate should still be monitored carefully. (Pennsylvania Department of State, Registration Forms and Documents)

Pennsylvania Law at a Glance

The state’s requirements arise under the Solicitation of Funds for Charitable Purposes Act, 10 P.S. § 162.1 et seq. (Pennsylvania Solicitation of Funds for Charitable Purposes Act)

The Act is intended to regulate charitable solicitation, require public financial disclosure, and protect Pennsylvania residents from deceptive or improper fundraising practices. The BCCO administers charity registration and maintains the state’s charitable solicitation records.

The present $750,000 audit threshold was established through Act 71 of 2017 and became effective 60 days after enactment in 2018. Before that change, Pennsylvania’s audit threshold was considerably lower. (Act 71 of 2017)

Preparing for a Pennsylvania Nonprofit Audit

A Pennsylvania organization approaching $750,000 in gross contributions should begin audit planning before fiscal year-end.

Your CPA will commonly request:

• Year-end trial balance
• General ledger
• Contribution detail by source
• Donor and grant schedules
• Private and government grant agreements
• Special-event revenue and direct-expense schedules
• In-kind contribution records
• Bank and investment reconciliations
• Accounts receivable and payable schedules
• Payroll reports
• Fixed-asset records
• Board and committee minutes
• Debt agreements
• Internal control documentation
• Prior-year financial statements
• Draft IRS Form 990 and BCO-10 information

The contribution schedule should clearly distinguish among private contributions, government funding, program-service revenue, membership income, and other receipts. That separation helps both the auditor and the organization determine whether Pennsylvania’s threshold was calculated correctly. (BCO-10 Instructions)

Common Pennsylvania Filing Problems

Pennsylvania charities frequently encounter compliance issues when their accounting records do not separate fundraising receipts from other revenue.

Common problems include:

Using total revenue instead of gross contributions

The audit threshold is contribution-based. Total revenue on the financial statements may not equal the figure used for Pennsylvania reporting. (10 P.S. § 162.5(f); BCO-10 Instructions)

Counting only Pennsylvania donations

Pennsylvania generally uses national contributions from all sources, even when the charity operates or fundraises in several states. (BCO-10 Instructions)

Including government contracts as contributions

Government grants and contracts are excluded from the Solicitation Act’s definition of contribution. (10 P.S. § 162.2)

Waiting until the BCO-10 is due to hire an auditor

An audit requires planning, confirmations, supporting schedules, testing, and management review. Hiring a CPA only shortly before the renewal deadline can delay the filing.

Sending incomplete financial statements

An audit report alone may not be sufficient. The submission ordinarily needs the full audited financial statement package, including the auditor’s opinion, financial statements, notes, and required supplementary information when applicable.

Can a Pennsylvania Charity Request a Waiver?

Pennsylvania permits an organization to request a waiver of an otherwise required audit, review, or compilation in certain circumstances. (Pennsylvania Department of State, Registration Forms and Documents)

The waiver request must follow the Department’s current waiver guidance and explain the circumstances supporting relief. A waiver should not be assumed to be automatic, and an organization should not delay audit planning while waiting for a decision. (Pennsylvania Department of State, Financial Statement Waiver Guidance)

A nonprofit considering a waiver should evaluate the filing requirements early and preserve documentation supporting its request.

Benefits Beyond Pennsylvania Compliance

An independent audit can provide value beyond completing the BCO-10 renewal.

Audited financial statements may help a nonprofit:

• Meet grant or lender requirements
• Improve board oversight
• Strengthen internal controls
• Identify accounting errors
• Support multi-state charitable registrations
• Increase donor and foundation confidence
• Prepare for future organizational growth
• Improve consistency between the financial statements and Form 990

For organizations conducting significant fundraising, the audit can also provide management with a clearer understanding of contribution restrictions, special-event reporting, and the allocation of program, management, and fundraising expenses.

Why Choose ELT CPA LLC?

ELT CPA LLC provides independent financial statement audit services for nonprofit and charitable organizations subject to Pennsylvania reporting requirements.

Our team understands that Pennsylvania’s audit threshold is based on gross annual contributions, not simply total revenue. We help organizations prepare contribution schedules, distinguish government funding from private support, coordinate the financial statements with Form 990, and assemble the information needed for the BCO-10 filing.

Whether your organization is crossing the $750,000 threshold for the first time or already undergoes an annual audit, ELT CPA LLC can help create an organized and efficient process.

Frequently Asked Questions

At what amount does Pennsylvania require a nonprofit audit?

A registered charitable organization that receives $750,000 or more in gross annual contributions generally must submit audited financial statements. (10 P.S. § 162.5(f))

Is the threshold based on revenue or contributions?

It is based on gross annual contributions, not total revenue. (10 P.S. § 162.5(f); BCO-10 Instructions)

Does Pennsylvania count contributions received outside the state?

Yes. The BCO-10 instructions state that gross annual contributions generally include total national contributions from all sources for the preceding fiscal year. (BCO-10 Instructions)

Do government grants count toward the threshold?

Government grants and contracts are not treated as contributions under the Solicitation Act’s statutory definition. (10 P.S. § 162.2)

What is required between $250,000 and $750,000?

An organization receiving at least $250,000 but less than $750,000 in annual contributions generally must submit either reviewed or audited financial statements. (10 P.S. § 162.5(f))

What is Form BCO-10?

Form BCO-10 is Pennsylvania’s Charitable Organization Registration Statement. It is used for initial registration and renewal by organizations subject to the state’s charitable solicitation law. (Pennsylvania Department of State, BCO-10 Instructions)

Are all Pennsylvania nonprofits required to register?

No. Certain organizations may qualify for an exclusion or exemption. Registration requirements depend on factors such as contribution levels, solicitation activities, organizational type, and whether individuals are compensated to solicit. (Pennsylvania Department of State, Information for Charitable Organizations)