Starting a nonprofit in Pennsylvania offers a compelling mission for those driven by the desire to address community needs, actively contribute to the betterment of society, and foster change.
If you’re planning to start a nonprofit organization, it’s important to understand the necessary steps, including fundraising, recruiting a board of directors, and filing critical regulatory documents.
Read on to learn the steps for starting a nonprofit in the Keystone State.
What is a Nonprofit?
A nonprofit organization (NPO) is an entity formed to pursue a specific mission or purpose that benefits the public, a particular group, or the community at large.
These entities often include educational institutions, advocacy groups, and charities. Nonprofits play a vital role in addressing societal issues and promoting change, focusing on a positive mission rather than financial gain.
How to Start a Nonprofit in Pennsylvania
Each state has specific requirements for starting and operating a nonprofit.
In Pennsylvania, it’s crucial to be aware of the tax-exempt 501(c)(3) requirements. In addition to following the steps listed below and understanding tax laws surrounding nonprofits, you’ll also want to consider how meeting software, such as OnBoard, helps nonprofits operate efficiently while improving regulatory compliance. Read on to learn more about how to start a nonprofit in Pennsylvania.
1. Name Your Organization
The name of any business or nonprofit plays a critical role in its overall identity by members of the public. A well-chosen name conveys your nonprofit’s mission and values and also provides a lasting impression on potential supporters. Doctors Without Borders is a great example of a nonprofit name that exudes professionalism and compassion, while clearly stating their purpose.
2. Recruit a Board of Directors
A board of directors is a group of individuals responsible for guiding and overseeing the nonprofit’s activities. Boards typically consist of a chair/president, vice president, secretary, fundraising chair, community outreach chair, and other roles that suit its specific mission. Recruiting professionals with diverse backgrounds can help the nonprofit stay true to its mission, remain financially accountable, and enjoy good standing with its beneficiaries. A successful board of directors will contribute to the nonprofit’s long-term success and positive impact on the community.
3. File Articles of Incorporation
Every legal entity must file formal documents to establish its existence. These documents are called the articles of incorporation and provide key details, such as the organization’s name, purpose, location, board structure, and officers. They also serve as a contract between the nonprofit and the state that defines its legal structure. In Pennsylvania, articles of incorporation must be filed with the Bureau of Corporations and Charitable Organizations.
4. Obtain Employer Identification Number
An employer identification number (EIN) is a unique identifier for all businesses, similar to a social security number. It’s used for various purposes, such as for tax filing, opening business bank accounts, and managing payroll. An EIN is important for nonprofits since they’re tax-exempt and have specifications when complying with federal reporting requirements. Understanding section 501(c)(3) versus 501(c)(4) of the internal revenue code will give you better insight into how nonprofits operate.
5. Establish Governing Documents and Policies
As your nonprofit begins to take off, it’s important to create governing documents and policies to provide a clear framework for operations, ensure legal compliance, and form an organized structure. Board bylaws lay out these components, which include:
- Responsibilities and powers of directors
- Organizational purpose statement
- Board structure, including board positions and term limits
- Voting rules, including how many members must be available for voting to occur
- Amending bylaws procedures
- Conflict of interest policy
6. Apply for Pennsylvania Tax Exemptions
To attain tax exemptions in Pennsylvania, your nonprofit will have to submit Form REV-72 to the Department of Revenue. This form outlines the organization’s purpose, structure, financials, and other pertinent information that demonstrates its eligibility for tax-exempt status.
OnBoard Powers Effective Boards
Nonprofits provide a structured framework to channel charitable, educational, and philanthropic efforts. They allow individuals to make a positive impact on society while receiving tax incentives that contribute to keeping their endeavors afloat.
Advanced meeting software, such as OnBoard, facilitates efficient communication, collaboration, and transparency among team members, the general public, and stakeholders. OnBoard technology enables nonprofits to operate seamlessly, maintain accountability, and build trust within their community.
OnBoard’s board management software includes powerful features to help nonprofit organizations operate effectively, such as:
- Real-time meeting analytics and progress tracking
- A secure messaging system
- Zoom and Microsoft Teams integration
- Detailed diversity reporting
- 24/7 customer support
- Security provided by Microsoft Azure
Download our free Board Meeting Minutes Template to learn how OnBoard helps nonprofit organizations work smarter while maintaining regulatory compliance.
Frequently Asked Questions (FAQ)
How Much Does it Cost to Start a Nonprofit in Pennsylvania?
The cost varies based on factors such as legal fees, size of the organization, and any professional consulting needed to launch the nonprofit. The filing fee for Pennsylvania's Articles of Incorporation is $125. Other additional charges may apply. If you have any questions about starting a nonprofit, contact the Pennsylvania Bureau of Charitable Organization at (717) 783-1720.
How Many Directors are Required for a Nonprofit in Pennsylvania?
In the state of Pennsylvania, the IRS requires a minimum of one director. Directors are responsible for overseeing the organization's activities, decisions, legal compliance, and ethical standards.
Three unrelated individuals will need to make up Pennsylvania's officer requirements: a president, secretary, and treasurer. Officers can hold other leadership positions, such as president and vice president. They also play key roles in the decision-making, governance, and overall operations of a nonprofit. Their primary responsibility is to ensure the nonprofit fulfills its mission.
About The Author
- Gina Guy is an implementation consultant who specializes in working with nonprofit organizations get the most from their board meetings. She loves helping customers ease their workloads through their use of OnBoard. A Purdue University graduate, Gina enjoys refinishing furniture, running, kayaking, and traveling in her spare time. She lives in Monticello, Indiana, with her husband.
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