PANO provides other assistance to members who are starting a new nonprofit organization through discounted trainings, free sample policies, etc). You can join even if your paperwork is not finalized. We recommend referring to the "Pennsylvania Nonprofit Handbook."
PANO´s Tips on Starting a Nonprofit Organization in Pennsylvania
1. Research Existing Nonprofits to Confirm a New Organization is Necessary
According to the National Center for Charitable Statistics, there are over 68,000 nonprofit organizations in Pennsylvania in 2009. As you begin the formation process, take a moment to consider if you should start a new nonprofit organization. To decide if a new nonprofit is necessary:
• Research if an organization already exists in your area that serves your cause. Consider working with that organization to accomplish more – together.
• Consider fiscal sponsorship, in which an umbrella 501(c) organization sponsors your project. Fiscal sponsors permit your cause to receive tax-deductible donations and often handle administrative paperwork.
2. Determine the Purpose of the Organization
Every organization must develop a mission statement that describes their reason for existing. This can be developed by meeting with potential clients, constituents, board members and other interested parties.
3. Determine the Structure of the Organization
There are 29 different types of nonprofits defined in the IRS code. You must determine the type of organization that you will form (e.g., a charitable corporation under 501(c)(3) or another kind of nonprofit: member or not, corporation or unincorporated, association, or trust). Do you want to be a membership organization or governed by a board of directors who elect their own successors? What interests or constituencies should be on the Board?
4. Choose your Board of Directors
Your board will help you transform your ideas into reality by helping establish goals and fundraising strategies. Pennsylvania law requires every nonprofit corporation to have a President, Treasurer, and Secretary (i.e. officers who perform comparable duties) and a single person may hold all three offices.
5. Appoint a Registered Agent
Identify your nonprofit’s Pennsylvania registered agent. A registered agent is a legal appointee who is responsible for receiving legal notices for your nonprofit. Your registered agent must be physically located in Pennsylvania and maintain an office that is open during regular business hours.
5. Write your Nonprofits Bylaws
Your bylaws will guide your organization's day to day operations. These should be drafted carefully and may require the assistance of an attorney experienced in nonprofit law to reflect the proper power relationships among those with an interest in the group. Learn more about writing bylaws in our Standards for Excellence Educational Resource Packet
6. File Articles of Incorporation with the Department of State
For organizations that plan to be incorporated, this is a key step. In Pennsylvania, you need to file your Articles of Incorporation with the Department of State. For more information or copies of the basic forms contact:
Pennsylvania Department of State - Bureau of Corporations and Charitable Organizations
308 North Office Building | P.O. Box 8722
Harrisburg, PA 17120-0029
If you expect to seek exemption as a charitable organization under Section 501 (c)(3), be sure to include the language required by the Internal Revenue Service as seen in this sample.
7. Publish your Incorporation
New nonprofits are required to advertise their intention to file or the filing of the articles of incorporation with the Department one time in two newspapers. Read more about the PA publishing requirement here
8. Obtain an Employer Identification Number from the IRS
You'll need this number to open a bank account, file informational returns with the IRS and withhold your employees' income tax. It helps when requesting a Pennsylvania sales tax exemption. You can obtain a Taxpayer Identification Number (also called an Employer Identification Number or EIN) by filling out an SS-4 form. Contact the IRS at 1-800-829-FORM or click here for an SS-4 form or more information.
9. Apply for 501(c)
Applying for 501(c) tax exemption is often the most complex, time-consuming and important steps in setting up a nonprofit. To receive §501(c)(3) tax-exempt status from the IRS, you must fill out an IRS 1023 form and attach your proposed budget, Articles of Incorporation (certified), and bylaws (a true copy). Resumes of your board members are helpful as well. This application should be filed within the first 15 months of your organization's existence. Contact the IRS at 1-800-829-FORM or click here to receive a copy of this form. There are other nonprofits that are not charities, such as Chambers of Commerce, etc. Different IRS forms are required for these.
If you are a smaller nonprofit, you may be eligible to complete the new IRS 1023-EZ. Learn more on the IRS website.
10. Filing for Pennsylvania Sales Tax-Exempt Status
To be exempt from paying sales tax you must meet the following criteria:
• Charitable Purpose: The institution must advance a charitable purpose.
• Private Profit Motive: The institution must operate ENTIRELY free from private profit motive.
• Community Service: The institution must donate or render gratuitously a substantial portion of its services.
• Charity to Persons: The institution must benefit a substantial and indefinite class of persons who are legitimate subjects of charity.
• Government Service: The institution must relive the government of some of its burden.
To request exemption from paying sales tax in Pennsylvania contact:
Pennsylvania Department of Revenue, Tax Forms Service Unit
711 Gibson Blvd.
Harrisburg, PA 17104-3200
Download Form REV-72 here.
PA Department of Revenue Resources:
• How do I get PA sales tax exemption for a non-profit organization?
• Instructions and application for sales tax exemption.
11. Register with the Pennsylvania Bureau of Charitable Organizations
If your nonprofit is soliciting contributions from Pennsylvania residents, you must register with the Bureau of Charitable Organizations prior to beginning any fundraising activities unless it meets one of the exemptions. The most common exemptions are:
• Gross national contributions of <$25,000 annually
• Type of organization:
• Religious institution
• Accredited educational institution
• Parent teacher association
• Law enforcement, firefighters, or public safety organization
• Public, nonprofit library organizations
Department of State
Bureau of Charitable Organizations
207 North Office Building
Harrisburg, PA 17120
1-800-732-0999 | website
How to Start a Non-Profit Organization in Pennsylvania
This guide from Harbor Business Compliance gives guidance on costs and timeline.
This guide from the National Council of Nonprofits give the 5 basic steps on forming a nonprofit.
Pennsylvania Articles of Incorporation: (Just About) Everything You Need to Know
This webpage from Harbor Compliance will help you prepare and file your Pennsylvania articles of incorporation to form a business or nonprofit corporation.
Life Cycle of a Public Charity
The IRS provides information, explanations, guides, forms and publications on all of these subjects – they are available through this IRS Website.
IRS Exempt Employer Toolkit
This publication from the IRS contains basic information employers need to collect information needed to determine and pay their and employees’ employment tax liability, file correct tax returns and withhold federal taxes.
Types of Nonprofit Organizations
This chart from GuideStar lists the different kinds of tax-exempt organizations and whether or not contributions to them are tax deductible.
Alternatives to staring a nonprofit: fiscal sponsorship
Fiscal sponsorship is a formal arrangement in which a 501(c)(3) public charity sponsors a project that may lack exempt status. This is an alternative to starting your own nonprofit and allows you to conduct fundraising activities and accept tax-deductible donations under your sponsor's exempt status.
- Fiscal Sponsorship: Who Does What?
This info-graphic from the National Council of Nonprofits covers the basic roles and responsibilities for a fiscal sponsorship.273.22 K | 9/15/2014
What do I do if I have a complaint about a charitable organization?
PANO is a charity, not a government agency, so we are not equipped to respond to complaints about charities. The only exception would be if the agency has been certified through our Standards for Excellence Program. Otherwise, we have produced a document that provides guidance on who to contact. We request that callers do not contact our office about this matter and instead consult the appropriate agency.
- Who to contact to report nonprofit abuse34.5 K | 3/18/2011