Misunderstood Pennsylvania Charity Laws

In my observation, this remains one of the most misinterpreted parts of Pennsylvania charity law:

PA Act 71, passed in 2017, effective for financial reporting of 2018 filings, increased the annual contribution levels at which a nonprofit must undergo an audit, review or compilation. As with many such laws, the key to understanding is knowing the definition of the terms used.

The new minimum reporting thresholds are:
Annual contributions of $750,000 and above: a CPA audit is required
Annual contributions between $250,000 and $750,000: A review or audit is allowed
Annual contributions between $100,000 and $250,000: A compilation, review or audit is allowed
Annual contributions below $100,000: Audit, review or compilation is optional

Pennsylvania defines these annual contributions as federated campaign contributions, membership dues (contribution portion only), all income from fundraising and gaming events, contributions from related organizations and general contributions. Grants from government organizations or other
nonprofit organizations are generally not included in this calculation.

The same definition of annual contributions is used to determine the requirement for state charity registration and annual filing for the smallest nonprofits. That means that registration is optional, not required, for a small charity funded mostly by government or other nonprofits.