How to Start a Nonprofit in Pennsylvania


Steve Goldstein
Steve Goldstein
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Start a Nonprofit in Pennsylvania

Are you looking to start a nonprofit in Pennsylvania? You’ve come to the right place. Known for its vibrant community and rich culture, Pennsylvania (often referred to as The Keystone State) is an ideal location for establishing a nonprofit organization. Unlike for-profit businesses, nonprofits focus on addressing pressing social issues and require a strong foundation, thorough research, and a clear mission targeting a specific community problem.

Embarking on the journey of creating a nonprofit entails various crucial steps, such as obtaining 501(c)(3) status. A 501(c)(3) organization is designed for charitable, religious, educational purposes, and more, qualifying it for federal and state tax exemptions.

In the spirit of Pennsylvania’s motto, “Virtue, liberty, and independence,” thousands of nonprofits are founded within the state each year. This article will provide a comprehensive guide to starting your own nonprofit corporation in Pennsylvania. Keep in mind that the steps discussed here are general guidelines, and modifications may be necessary depending on your specific circumstances. To gain a deep understanding of how to start a nonprofit in Pennsylvania, we encourage you to read this article in its entirety.

What is a Nonprofit in Pennsylvania?

Nonprofit organizations are legal entities that operate to serve public benefits and address community issues. Unlike for-profit organizations, nonprofits do not aim to generate any profit. The Internal Revenue Service (IRS) generally exempts nonprofit organizations from tax. However, based on the business entity structure, you will receive tax exemptions as a nonprofit.

In Pennsylvania, ensure you have a community issue to address before you start forming your nonprofit. It can generally be education, religion, charity, social service, or other social issues. Nonprofits do not pay taxes on the money they receive through fundraising programs, donations, or any charitable funding.

Types of Nonprofits in Pennsylvania

The first thing one has to decide is what type of nonprofit structure one wants. There are several types of nonprofits one can start. Here is a list of nonprofit types one can choose from-

  1. Nonprofit LLC
  2. Nonprofit Corporation
  3. Unincorporated Nonprofit

Forming an LLC in Pennsylvania for your nonprofit can be a smooth option. However, having a corporation is less complex than having a nonprofit LLC. Hence, it is wise to start a nonprofit corporation instead of an unincorporated nonprofit or nonprofit LLC.

LLCBuddy Editorial Team.

Technically, starting a corporation for your nonprofit protects your personal assets but also is eligible for Federal and State tax exemptions. When you form an LLC for your nonprofit, it only protects your personal assets but does not give you any tax exemptions. On the other hand, a nonprofit Corporation has both corporation and limited liability company benefits. You can also have an unincorporated structure where you don’t have to register it. Unincorporated nonprofits in Pennsylvania might be eligible for tax exemptions (check with Pennsylvania Department of Revenue), but this type of organization does not get to enjoy limited liability and personal asset protection.

How to Start a Nonprofit Corporation in Pennsylvania

Setting up a nonprofit corporation requires a few things to consider. Name of the nonprofit, initial directors, drafting bylaws, get a Registered Agent, obtain tax IDs, insurance, and a bank account – these are important steps you must follow. The steps mentioned here are general business formation steps. State-wise, some steps can be different. Getting an expert consultation before you start your nonprofit corporation formation is recommended. Here are the steps explained below-

Step 1: Get a Suitable Name for Your Pennsylvania Nonprofit Corp

The first step is to name your nonprofit corporation. You must be sure that the name is available and that no other organization is using this name. You can check the Pennsylvania LLC name search to find the best suitable name for your organization. You must follow those rules to avoid any legal issues later. You can reserve the name for 120 days for any domestic entity (such as a nonprofit LLC) if you’re not forming the nonprofit immediately.

Step 2: Appoint the Initial Board of Directors

The next step is to get your nonprofit’s initial board of directors. It is very important when you are setting up a nonprofit corporation. You need at least One unrelated directors to start the organization. If you don’t choose a minimum of One directors, it will automatically become a member-managed corporation.

Step 3: Appoint Your Pennsylvania Registered Agent

The third step is to get a Pennsylvania Registered Agent for your nonprofit corporation. The Registered Agent is a person who receives all the legal documents on your behalf. It is necessary to get a registered agent. He/she must be above 18 years old and have a physical address in Pennsylvania.

Step 4: Write Pennsylvania Nonprofit Bylaws

The next important step is to write the company bylaws. The directors and board members must decide how the meetings, elections, voting, and other corporate activities will be held. These bylaws must comply with the Pennsylvania state law. It is similar to an LLC operating agreement in Pennsylvania for the LLC owners.

Step 5: File the Pennsylvania Articles of Incorporation

This is the most important step. File your Articles of Incorporation with the Pennsylvania Secretary of State. You can do it through two methods, online and by mail. All the formation forms, such as the Pennsylvania LLC Certificate of Organization form, the Pennsylvania Articles of Incorporation form for corporations, forms for LLPs, and all others can be found on the Pennsylvania SOS official website. Submit the details of your nonprofit corporation, like the name of the nonprofit, address, name and address of the registered agent, operation dates, directors’ details, and more information related to your company. You can send the form (for offline filing) and the filing fee of $125 for online and by mail filing to the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations, P.O. Box 8722, Harrisburg, PA 17105 or upload it online (if available).

Step 6: Obtain Tax ID for Your Pennsylvania Nonprofit Corporation

The subsequent step involves obtaining a Tax ID for your nonprofit corporation. You will need to acquire an Employer Identification Number (EIN) from the official IRS website. To obtain the EIN, submit your application to the IRS office either by mail or through their online platform. There is no associated cost for this process.

Step 7: Get Business Licenses in Pennsylvania

The next step is to get the business licenses you need to run your nonprofit organization in Pennsylvania. Check with the local government office if any special licenses you need to run your nonprofit. You can file your nonprofit as a charity if you want.

Step 8: Federal Tax Exemption

You must submit Form 1023 to the IRS to file for federal tax exemption. This form, titled “Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,” is required for all nonprofit corporations. Smaller nonprofits have the option to file Form 1023-EZ instead. You will be prompted to provide details about your organization upon obtaining the relevant form. Complete the form with the necessary information and submit it. The filing fees are $600 for Form 1023 and $275 for Form 1023-EZ.

Step 9: State Tax Exemption

Once you get the Federal Tax Exempt, it is time for State Tax Exempt. In Pennsylvania, you must apply for the tax exemption to Pennsylvania Department of Revenue. Get the form, fill it up with the correct details, and send it to the office. You may need to pay a fee along with the form and supportive documents to apply for the State Tax Exemption. You need REV – 72 (TR) to apply for the state tax exemption. Read Pennsylvania classification of taxes to learn more about the Pennsylvania tax structure.

Step 10: Get Insurance for Your Pennsylvania Nonprofit

Once you start your nonprofit, you must get insurance to protect your organization. You must get workers’ compensation and unemployment insurance if you have employees. Based on your nonprofit structure, you might need general liability insurance, property, vehicle, auto insurance, etc. You can contact the insurance providers to learn more about which are required for your organization. Also, you can contact Pennsylvania Insurance Department for more information.

After Forming Your Pennsylvania Nonprofit Corporation

Once your nonprofit is formed, there are additional steps to complete:

  • Get a Business Bank Account: You must get a business account for all types of business-related transactions in Pennsylvania. You may need different documents based on the bank and place of business. Check with the bank for it.
  • File Nonprofit as Charity: This is optional. Your nonprofit is either for charity purposes or any purpose that meets your community’s needs. If your organization is for charity purposes, then you can file your nonprofit as a charity to enjoy tax exemptions.
  • Other Business Compliances: You may need additional compliances based on your nonprofit type. Check with your attorney or local authority for more information.

Names of Nonprofit Corporations in Pennsylvania

Following are some of the Nonprofit Organizations in Pennsylvania. The contact information of these organizations can be found on Pennsylvania SOS official websites.

  • Phoenixville Charities
  • Pittsburgh Charities
  • Pittston Charities
  • Plymouth Meeting Charities
  • Pottstown Charities
  • Pottsville Charities
  • Quakertown Charities
  • Reading Charities.

FAQs

What are the steps to start a nonprofit in Pennsylvania?
To start a nonprofit in Pennsylvania, you must incorporate with the Pennsylvania Department of State, appoint an initial board of directors, create a mission statement and organizational documents, obtain an EIN, register with the Department of State Bureau of Charitable Organizations, register with the Pennsylvania Department of Revenue, and fulfill any other state and federal requirements.
What paperwork do I need to submit to start a nonprofit in Pennsylvania?
To start a nonprofit in Pennsylvania, you need to submit your Articles of Incorporation, a Statement of Purpose, a Budget, a Nonprofit Corporation Agreement, and any other documents required by the Pennsylvania Department of State.
How long does it take to start a nonprofit in Pennsylvania?
The process of starting a nonprofit in Pennsylvania typically takes 4-6 weeks, depending on the amount of paperwork involved and the speed of processing by the Pennsylvania Department of State.
How much does it cost to start a nonprofit in Pennsylvania?
The cost of starting a nonprofit in Pennsylvania can vary, but typically ranges from $50-$400, depending on the type of organization and filing fees.
Do I need to hire a lawyer to start a nonprofit in Pennsylvania?
It is not required to hire a lawyer to start a nonprofit in Pennsylvania, but it is recommended, as a lawyer can help you navigate the legal requirements.
How do I obtain an Employer Identification Number (EIN) for my nonprofit in Pennsylvania?
To obtain an EIN for your nonprofit in Pennsylvania, you can apply for one online through the Internal Revenue Service website or by submitting Form SS-4.
What type of documents do I need to maintain for my nonprofit in Pennsylvania?
To maintain a nonprofit in Pennsylvania, you need to keep records of all financial transactions, annual budget, minutes of meetings, and any other pertinent documents.
Do I need to file for tax exemption for my nonprofit in Pennsylvania?
All nonprofits in Pennsylvania are required to apply for tax exemption with the Pennsylvania Department of Revenue.
Are there any reporting requirements for nonprofits in Pennsylvania?
Nonprofits in Pennsylvania are required to submit an annual report to the Department of State Bureau of Charitable Organizations, and they may also be required to file additional reports depending on the type of organization.
What are the regulations for fundraising in Pennsylvania?
Nonprofits in Pennsylvania are subject to regulations on fundraising, including limits on the amount of money that can be raised, requirements for disclosure of financial information, and record keeping requirements.
What are the steps for starting a nonprofit in Pennsylvania?
The steps for starting a nonprofit in Pennsylvania include
What is the filing fee for a nonprofit in Pennsylvania?
The filing fee for a nonprofit in Pennsylvania is $125.
Are there any special requirements to form a nonprofit in Pennsylvania?
Yes, when forming a nonprofit in Pennsylvania, the articles of incorporation must include language that states the purpose of the corporation and the names and addresses of the incorporators.
Is there a minimum amount of capital required to form a nonprofit in Pennsylvania?
No, there is no minimum amount of capital required to form a nonprofit in Pennsylvania.
Do I need to register with the IRS to form a nonprofit in Pennsylvania?
Yes, it is necessary to register with the IRS to form a nonprofit in Pennsylvania.
Is it necessary to open a bank account for a nonprofit in Pennsylvania?
Yes, it is necessary to open a bank account for a nonprofit in Pennsylvania.
Are there any annual renewal requirements for nonprofits in Pennsylvania?
Yes, nonprofits in Pennsylvania must renew their articles of incorporation every five years.
Is it necessary to obtain a business license to form a nonprofit in Pennsylvania?
No, it is not necessary to obtain a business license to form a nonprofit in Pennsylvania.
What information is needed to register a nonprofit in Pennsylvania?
The information needed to register a nonprofit in Pennsylvania includes
Are there any special rules for nonprofits in Pennsylvania?
Yes, there are special rules for nonprofits in Pennsylvania including
What is the process for applying for tax-exempt status in Pennsylvania?
The process for applying for tax-exempt status in Pennsylvania includes
Does a nonprofit in Pennsylvania need to have a board of directors?
Yes, a nonprofit in Pennsylvania must have a board of directors.
Is it necessary to obtain a Pennsylvania sales tax exemption number for a nonprofit?
Yes, it is necessary to obtain a Pennsylvania sales tax exemption number for a nonprofit.
Are there any special regulations for nonprofits in Pennsylvania regarding fundraising activities?
Yes, nonprofits in Pennsylvania must register with the Pennsylvania Department of State before engaging in any fundraising activities.
Is it necessary to obtain a Federal Employer Identification Number for a nonprofit in Pennsylvania?
Yes, it is necessary to obtain a Federal Employer Identification Number for a nonprofit in Pennsylvania.
Is it necessary to obtain a Pennsylvania Corporation Tax Account Number for a nonprofit in Pennsylvania?
Yes, it is necessary to obtain a Pennsylvania Corporation Tax Account Number for a nonprofit in Pennsylvania.
Is it necessary to file an annual report with the Pennsylvania Department of State for a nonprofit?
Yes, it is necessary to file an annual report with the Pennsylvania Department of State for a nonprofit.
Are there any restrictions on the activities of a nonprofit in Pennsylvania?
Yes, nonprofits in Pennsylvania are subject to certain restrictions on their activities, including engaging in political activities, providing monetary benefits to members, and engaging in activities that are unrelated to their charitable purpose.
How long does it take to form a nonprofit in Pennsylvania?
It usually takes between 4-6 weeks to form a nonprofit in Pennsylvania.
Is it necessary to obtain insurance for a nonprofit in Pennsylvania?
Yes, it is recommended to obtain insurance for a nonprofit in Pennsylvania.
Are there any special rules for nonprofits in Pennsylvania regarding employees?
Yes, nonprofits in Pennsylvania are subject to specific rules regarding employees, including paying taxes, filing payroll reports, and providing workers’ compensation insurance.
Are there any special rules for nonprofits in Pennsylvania regarding investments?
Yes, nonprofits in Pennsylvania must follow certain rules regarding investments, including avoiding conflicts of interest and ensuring the investments are in keeping with the nonprofit’s mission and purpose.
Are there any special rules for nonprofits in Pennsylvania regarding charitable contributions?
Yes, nonprofits in Pennsylvania must follow certain rules regarding charitable contributions, including filing the appropriate forms and reporting the contributions to the IRS.
Are there any special rules for nonprofits in Pennsylvania regarding donations?
Yes, nonprofits in Pennsylvania must follow certain rules regarding donations, including being transparent about the use of donated funds and providing donation receipts.

Also Read

Why Pennsylvania Nonprofit Corporation is So Important

One of the main reasons why nonprofit corporations are so important in Pennsylvania is because they fill gaps in service provision that government agencies and for-profit businesses may not address. Nonprofits often step in to provide support and resources to marginalized communities, individuals facing hardships, and sectors of society that may be overlooked by other entities. Whether it’s offering food assistance, housing support, mental health services, or educational programs, nonprofits help meet the diverse needs of Pennsylvania residents.

Moreover, Pennsylvania nonprofit corporations often serve as a voice for those who may not have the means to advocate for themselves. These organizations work tirelessly to raise awareness about important social issues, promote policy changes, and empower individuals to speak up and demand change. Nonprofits are instrumental in catalyzing social movements, influencing public opinion, and holding decision-makers accountable for their actions.

In addition, nonprofit organizations in Pennsylvania contribute significantly to the state’s economy. Despite not operating for profit, these entities generate economic activity, create jobs, and stimulate local economies. The services provided by nonprofits not only improve the quality of life for residents but also contribute to the overall well-being of communities by fostering growth and development.

Furthermore, Pennsylvania nonprofit corporations are vital in fostering a sense of community and solidarity among residents. By bringing together individuals who share common interests, beliefs, or goals, nonprofits create opportunities for building social connections, promoting collaboration, and nurturing a sense of belonging. These organizations play a critical role in strengthening the social fabric of Pennsylvania by promoting unity and cooperation among its residents.

Nonprofits in Pennsylvania also serve as a training ground for future leaders and activists. By engaging volunteers, interns, and employees in meaningful work that aligns with their passions and values, nonprofits help cultivate a new generation of changemakers who are committed to making a positive impact on society. These organizations provide valuable skills, experiences, and opportunities for personal and professional growth, shaping the leaders of tomorrow.

Overall, the importance of Pennsylvania nonprofit corporations cannot be overstated. These organizations play a vital role in addressing societal challenges, advocating for social justice, promoting economic growth, fostering community cohesion, and nurturing future leaders. Without the tireless efforts of nonprofits, many individuals and communities in Pennsylvania would be left without the support and resources they need to thrive. As such, it is crucial to recognize and support the invaluable contributions of nonprofits and to ensure their continued success in shaping a brighter future for all residents of the Keystone State.

Conclusion

Starting a nonprofit corporation in Pennsylvania is an incredible way to give back to your community and positively impact the causes that matter most to you. By forming a nonprofit, you can provide essential services, promote awareness, and make a lasting difference in the lives of those who need it most. In Pennsylvania, a lot of nonprofit organizations are there to cater to people in need. Starting a nonprofit corporation is better than an LLC, as it provides limited liability and tax benefits. It helps you save taxes. If you want to start a nonprofit in Pennsylvania, you must follow the steps mentioned above in the article.

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