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§ 162.5. Registration of charitable organizations; financial reports; fees; failure to file

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 10 P.S. Charities and WelfareEffective: February 20, 2018

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 10 P.S. Charities and Welfare (Refs & Annos)
Chapter 6. Solicitation of Funds for Charitable Purposes Act (Refs & Annos)
Effective: February 20, 2018
10 P.S. § 162.5
§ 162.5. Registration of charitable organizations; financial reports; fees; failure to file
(a) Registration and approval required.--A charitable organization, unless exempted from registration requirements pursuant to section 6,1 shall file a registration statement with the department. This statement must be refiled annually and postmarked by the fifteenth day of the fifth month following the close of its fiscal year in which the charitable organization was engaged in solicitation activities. The department shall review the statement pursuant to subsection (r). No charitable organization shall solicit contributions or have contributions solicited in its behalf before approval of its registration statement by the department.
(b) Filing of statement.--It shall be the duty of the president, chairman or principal officer of each charitable organization to file the registration statement, financial report and fee required under this section. The registration statement shall be made by two authorized officers subject to 18 Pa.C.S. § 4904 (relating to unsworn falsification to authorities), including the chief fiscal officer of the organization, and shall contain all of the following information:
(1) The name of the organization and any other name or names under which it intends to solicit contributions.
(2) The principal address and telephone number of the organization and the addresses and telephone numbers of any offices in this Commonwealth. If the organization does not maintain an office, the name and address of the individual having custody of its financial records.
(3) The names and addresses of any affiliates which share in the contributions or other revenue raised in this Commonwealth.
(4) The names and addresses of the officers, directors and trustees and the principal salaried executive staff officers.
(5) A copy of the financial report required under subsection (e).
(6) A copy of any determination of the organization's tax-exempt status under the Internal Revenue Code of 1986 (Public Law 99-514) and, for organizations granted tax-exempt status under section 501(c)(3), a copy of the last filed Internal Revenue Service Form 990 and Schedule A for every charitable organization and parent organization.
(7) The date when the organization's fiscal year begins.
(8) Whether:
(i) the organization is authorized by any other governmental authority to solicit contributions;
(ii) the organization or any of its present officers, directors, executive personnel or trustees are or have ever been enjoined in any jurisdiction from soliciting contributions or have been found to have engaged in unlawful practices in the solicitation of contributions or administration of charitable assets;
(iii) the organization's registration or license has been denied, suspended or revoked by any governmental agency together with the reasons for such denial, suspension or revocation; and
(iv) the organization has voluntarily entered into an assurance of voluntary discontinuance or agreement similar to that set forth in section 19(b),2 together with a copy of that agreement.
(9) A clear description of the specific programs for which contributions will be used and a statement whether such programs are planned or in existence.
(10) The names and addresses of any professional solicitors, professional fundraising counsels and commercial coventurers who are acting or have agreed to act on behalf of the organization.
(11) The names of the individuals or officers of the organization who are in charge of any solicitation activities, who will have final responsibility for the custody of the contributions and who will be responsible for the final distribution of the contributions.
(12) Whether any of the organization's officers, directors, trustees or employees are related by blood, marriage or adoption to each other or to any officers, agents or employees of any professional fundraising counsel or professional solicitor under contract to the organization or to any supplier or vendor providing goods or services to the organization, and the names and business and residence addresses of any such related parties. Where the number of employees or vendors renders it impractical for the registrant to contact them on an individual basis regarding the existence of any of the relationships set forth under this section, the registrant may file an affidavit stating which relationships, if any, exist to the best of the affiant's information and belief.
(13) Any other information required by the regulations of the department.
(c) Additional filings.--With the initial registration only, each charitable organization required to be registered shall also file with the department the following documents:
(1) A copy of the organization's charter, articles of organization, agreement of association, instrument of trust, constitution or other organizational instrument and bylaws.
(2) A statement setting forth where and the date when the organization was legally established, the form of its organization and its tax-exempt status together with a copy of the letter of exemption, if any, issued by the Internal Revenue Service.
(d) Federal tax exemption determination.--Each charitable organization registered with the department shall file with the department a copy of any Federal tax exemption determination letter received after the initial registration within 30 days after receipt, and any amendments to its organizational instrument within 30 days after adoption.
(e) Financial report.--With each registration statement filed under this section, a charitable organization must file a financial report for the immediately preceding fiscal year, which shall contain a balance sheet and statements of revenue, expenses and changes in fund balances indicating the organization's gross revenue, the amount of funds received from solicitations or other fundraising activities and all expenditures for supplies, equipment, goods, services, programs, activities or other expenses, a detailed list of all salaries and wages paid and expenses allowed to any officer or employee if the organization is not required to file an Internal Revenue Service Form 990 and the disposition of the net proceeds received from solicited contributions or other fundraising activities.
(f) Audit of certain financial reports.--The financial report of every charitable organization which receives annual contributions of $750,000 or more shall be audited by an independent certified public accountant or public accountant. Every charitable organization which receives annual contributions of at least $250,000, but less than $750,000, shall be required to have a review or audit of their financial statements performed by an independent certified public accountant or public accountant. Every charitable organization which receives annual contributions of at least $100,000, but less than $250,000, shall be required to have a compilation, review or audit of their financial statements performed by an independent certified public accountant or public accountant. A compilation, audit or review is optional for any charitable organization which receives annual contributions of less than $100,000. Audits shall be performed in accordance with generally accepted auditing standards, including the Statements on Auditing Standards of the American Institute of Certified Public Accountants, whereas reviews shall be performed in accordance with the Statements on Standards for Accounting and Review Services of the American Institute of Certified Public Accountants.
(g) Governmental audits.--Government audits of government grants shall be accepted and shall be included as part of the financial statements.
(h) Other acceptable reports.--The Department may accept a copy of a current financial report previously prepared by a charitable organization for a governmental agency in another jurisdiction in compliance with the laws of that jurisdiction, provided that the report filed with such other governmental agency shall be substantially similar in content to the report required by this section.
(i) Reports to accompany audit.--Audited and reviewed financial statements must be accompanied by the report prepared and signed by the independent public accountant.
(j) Optional departmental action.--The department shall have the discretion to require that an audit or review be submitted by any charitable organization which files a registration statement. The department shall also have the discretion to accept the financial statement submitted by the organization in lieu of an audit or review where special facts and circumstances are presented.
(k) Time extension for filings.--For good cause shown, the department may extend the time for the annual filing of a registration statement or financial report to a mailing date not to exceed the fifteenth day of the eleventh month following the close of the fiscal year during which time the previous registration remains in effect.
(l) Cancellation of registration.--In no event shall the registration of a charitable organization continue in effect after the date the organization should have filed, but failed to file, its financial report in accordance with this section. Such organization shall not be eligible to file a new registration statement until it shall have filed the required financial report with the department.
(m) Reports by affiliates.--
(1) Each affiliate whose parent organization has its principal place of business in this Commonwealth may separately file the registration statement or financial information required by this section, or report the required information to its parent organization which shall then file a combined registration statement and financial report for its Pennsylvania affiliates. There shall be appended to each combined report a schedule, containing such information as may be prescribed in the regulations of the department, reflecting the activities of each affiliate, which shall contain a certification, under oath, by an official of the organization, that the information contained therein is true. The failure of a parent organization to file a combined registration statement and financial report shall not excuse either the parent organization or its affiliates from complying with the requirements of this section.
(2) If an affiliate is soliciting in this Commonwealth but its parent organization has its principal place of business outside this Commonwealth, both the affiliate and the parent organization shall independently comply with all of the registration requirements of this section.
(n) Federated organizations.--An independent member agency of a federated fundraising organization shall independently comply with the provisions of this section unless specifically exempted or unless it receives allocations solely from the federated fundraising organization and does not independently solicit contributions. Donor choice programs are deemed to be independent solicitations.
(o) Retention of records, etc.--Each charitable organization required to register shall maintain records, books and reports for at least three years after the end of the period of registration to which they relate, which shall be available for inspection upon demand by the department and the Office of Attorney General.
(p) Annual registration fees.--A charitable organization which submits a short form registration statement pursuant to section 73 or receives contributions of $25,000 or less during the immediately preceding fiscal year shall pay an annual registration fee of $15. A charitable organization which receives contributions in excess of $25,000 but less than $100,000 during the immediately preceding fiscal year shall pay an annual registration fee of $100. A charitable organization which receives contributions in excess of $100,000 but not exceeding $500,000 during the immediately preceding fiscal year shall pay an annual registration fee of $150. A charitable organization which receives contributions in excess of $500,000 during the immediately preceding fiscal year shall pay an annual registration fee of $250. A parent organization filing on behalf of one or more affiliates and a federated fundraising organization filing on behalf of its member agencies shall pay a single annual registration fee for itself and such other affiliates or member agencies included in the registration statement.
(q) Late filing fees.--In addition to the registration fee, an organization failing to file a registration application by the due date shall pay an additional fee of $25 for each month or part of the month after the date on which the registration statement and financial report were due to be filed or after the period of extension granted for such filing.
(r) Department review.--The department shall examine each registration statement and supporting documents filed by a charitable organization and shall determine whether the registration requirements are satisfied. If the department determines that the registration requirements are not satisfied, the department must notify the charitable organization within 15 working days of its receipt of the registration statement; otherwise the registration statement is deemed to be approved. Within 15 days after receipt of a notification that the registration requirements are not satisfied, the charitable organization may request a hearing. The hearing must be held within 15 days of receipt of the request, and a determination must be rendered within three working days of the hearing.
(s) Administration of charitable contributions.--A charitable organization shall maintain and administer all contributions raised on its behalf through an account in the name of the charitable organization and under its sole control.
(t) Updating information.--Any material change in any information filed with the department pursuant to this section shall be reported in writing by the registrant to the department not more than 30 days after such change occurs.

Credits

1990, Dec. 19, P.L. 1200, No. 202, § 5, effective in 60 days. Amended 1992, July 9, P.L. 436, No. 92, § 2, imd. effective; 2001, June 22, P.L. 588, No. 45, § 1, effective in 60 days; 2006, Oct. 27, P.L. 1180, No. 121, § 1, effective in 60 days [Dec. 26, 2006]; 2014, Oct. 14, P.L. 2493, No. 141, § 1, effective in 60 days [Dec. 15, 2014]; 2017, Dec. 22, P.L. 1227, No. 71, § 1, effective in 60 days [Feb. 20, 2018]; 2017, Dec. 22, P.L. 1228, No. 72, § 1, effective in 60 days [Feb. 20, 2018].
HISTORICAL AND STATUTORY NOTES
Act 2006-121 legislation
Section 2 of 2006, Oct. 27, P.L. 1180, No. 121, effective in 60 days [Dec. 26, 2006], provides that “[t]he amendment of section 5(f) of the act shall apply to financial reports covering a period which concludes after the effective date of this section.”
Prior Laws:
1963, Aug. 9, P.L. 628, § 3 (10 P.S. § 160-3).
1972, Oct. 26, P.L. 1011, No. 246, §§ 4, 5.
1982, April 9, P.L. 319, No. 90, § 2.
1986, April 30, P.L. 107, No. 36, § 6 (10 P.S. § 161.6).

Footnotes

10 P.S. § 162.6.
10 P.S. § 162.19.
10 P.S. § 162.7.
10 P.S. § 162.5, PA ST 10 P.S. § 162.5
Current through 2020 Regular Session Act 8. Some statute sections may be more current, see credits for details.
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