This guide was created using Harbor Compliance’s “How to Start a Nonprofit in Pennsylvania” webpage [A], my professor Dr. Jim Egenrieder’s example document on how to establish a 501(c)(3) [D], information provided by federal and state government websites, the IRS website, and various other resources. All references are listed below each step and correspond to a list of sources at the bottom.
How to Start a Non Profit Conservation Organization in Pennsylvania
1. Name your organization & create its mission statement
o The name sets the tone and identity of the organization while the mission statement clarifies in a concise but compelling manner what it is that the organization seeks to do or accomplish. Ensure that the name is original and available using the PA Department of State’s corporation name search engine (https://www.corporations.pa.gov/search/corpsearch). For profit organizations are required to have words like “corporation,” “company,” or “fund,” but non-profits are exempt from this requirement.
o References: [A, B, C, D]
2. Expand on the mission statement by writing its vision statement
o While the mission statement briefly explains the goal of the NPO, the vision statement expands on it by stating how it is that goal will be accomplished. This adds credibility by providing a general plan on what the NPO will be doing to achieve its mission.
o References: [D]
3. Recruit at least 1 Incorporator, at least 3 Initial Directors, and appoint Officers
o The incorporator is required to sign the NPO’s Articles of Incorporation. The board of directors serve as the NPO’s governing body and are stakeholders in its success. As such they should be qualified, invested in, and capable of fulfilling the vision statement as well as adjusting and responding to adversity along the way.
o The director requirements are the following:
§ Minimum of 1; default of 3
§ A natural person age 18 or older, no residency requirement
§ Term: 1 year
§ The quorum, or minimum number of members that must be present at any meeting to make its proceedings valid, must be a majority
§ Committee: minimum of 1 director
o The officer requirements are the following:
§ A president, a secretary, and a treasurer
§ The president and secretary must be natural persons age 18 or older, the treasurer can be a corporation or natural person age 18 or older
§ Two or more offices may be held by the same individual
o References: [A, D]
4. Appoint a Registered Agent
o Responsible for receiving legal notices on behalf of the NPO
o Must physically be located in Pennsylvania and maintain an office open during regular business hours
o References: [A]
5. Prepare, file, and then publish the Articles of Incorporation
o Filing these papers with the Pennsylvania Department of State’s Bureau of Corporation and Charitable Organizations makes the creation of the NPO official. These articles protect the NPO’s board and staff from liabilities by making the NPO responsible for all debts and liabilities rather than any individuals.
o The Articles of Incorporation can be submitted via mail or online and can be found at the following URL: (https://www.dos.pa.gov/BusinessCharities/Business/RegistrationForms/Pages/default.aspx). There is a $125 fee and with a 1–2-week turnaround time.
o Additionally, a Pennsylvania Docketing Statement is required to be submitted with the Articles of Incorporation. This is a supplemental form comparable to a coversheet that includes some basic information about the company. This form can be found at the above URL as well.
o Pennsylvania corporations are required to publish the filing of their Articles of Incorporation in 2 newspapers of general circulation in the county that the registered agent is located in, with one being a legal newspaper. It is recommended but not required to wait until after the Articles of Incorporation are approved before publishing them.
o References: [A, D, E, F]
6. File an Initial Report
o While this is not required in Pennsylvania, it can help to establish and preserve the NPO’s good standing. The initial report is filed within the first few months after forming and provides the state with basic information about the NPO.
o References: [A, G]
7. Obtain an Employer Identification Number (EIN)
o The EIN is a unique 9 digit number assigned to an NPO by the IRS and is used to open a bank account, submit 990 returns to the IRS, and apply for 501(c)(3) status that can get the NPO eligibility for tax exemptions.
o The application form for an EIN is on the IRS website at the following URL: (https://www.irs.gov/forms-pubs/about-form-ss-4). It can be submitted online with no turnaround, fax with a 4 day turnaround, or mail with a 5 week turnaround.
o References: [A, H]
8. Establish a Record/Document Keeping System
o There are many important, official, legal, and financial documents that must be kept track of in an organized manner for future reference including the Articles of Incorporation, EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, financial reports, and more. Explore options and choose one that can be used effectively and efficiently.
o References: [A, D]
9. Develop an Accounting System & Budget
o Hire an accountant familiar with NPO’s if the board lacks someone with financial or accounting background. It is crucial to have organized accounting practices and structure as the finances need to be readily available for the public, funders, and government.
o With help from the accountant, create a budget outlining the plan for the NPO’s financial activity in effort to achieve its mission and vision. Include potential income, donations/member fees, costs, taxes, and then consider what grants will be applied for. Keep in mind IRS budget thresholds affecting reporting requirements and other implications of the budget.
o References: [D]
10. Establish an Initial Draft of Bylaws and a Conflict of Interest Policy
o Bylaws are the governing documents and policies of the NPO. They serve as the rules, operating manual, and roadmap for governance of the NPO. Hire an attorney to help draft them in accordance with the Articles of Incorporation and the law. They will then be reviewed and ratified by the board at the first meeting.
o The Conflict of Interest Policy is required for the 501(c)(3) application, and so should be created in the same process. This policy protects the NPO’s interest when someone in a key position has a competing interest and is making decisions for their own benefit rather than the NPO.
o References: [A, D, I]
11. Hold the First Organizational Meeting of the Board of Directors
o Approve the bylaws and conflict of interest policy, elect directors, appoint officers, review budget, approve decisions about upcoming courses of action like opening a bank account, and record details in the meeting minutes.
o References: [A]
12. Get Pennsylvania State Tax Identification Numbers/Accounts
o There will likely be multiple tax ID’s. There would be one for employer withholding tax, one for sales tax, and potentially more. The application form can be found through and submitted to the Pennsylvania Department of Revenue via mail or online: (https://www.revenue.pa.gov/Pages/default.aspx).
o References: [A, J]
13. Apply for 501(c)(3) status
o This is a very important step, granting a variety of tax exemptions and public charity status, allowing application for grants, and improving fundraising. It would be best to receive support from an attorney in the application process to ensure accurate completion. Obtain Form 1023 from the IRS https://www.irs.gov/forms-pubs/about-form-1023, along with the instructions https://www.irs.gov/pub/irs-pdf/i1023.pdf, mail it in to the IRS with a $275 application fee for a 3-6 month turnaround.
o References: [A, D, K, L]
14. Apply for a Data Universal Numbering System (DUNS) number & Register with System for Award Management (SAM)
o Dun and Broadstreet is a highly reputable private business credit reporting agency. By obtaining a DUNS number anyone interested in better understanding the NPO’s credit history and trustworthiness can find that information through the agency. This is required for federal grants and greatly assists in obtaining investments or other means of funding. Go to DnB’s website to begin the application: (https://www.dnb.com/duns-number/get-a-duns.html).
o SAM is the official U.S. Government system that along with the DUNS number allows for the receipt of federal financial assistance. Free annual reregistration is required to remain eligible. Register on https://sam.gov/content/home.*
o *On April 4, 2022, the federal government has changed the system: DUNS numbers have now been replaced by Unique Entity ID. New entities can get their Unique Entity ID at SAM.gov to complete an entity registration.
o References: [D, M, N, O, P]
15. File for Business Registration Certificate
o The PA-100 Business Entity Registration is required to register for certain taxes and services administered by the Pennsylvania Department of Revenue and Department of Labor & Industry. This process can be done online at (https://www.pa100.state.pa.us).
o References: [D, Q, R]
16. Apply for State Tax Exemption
o In Pennsylvania, after obtaining the IRS determination letter approving the NPO’s 501(c)(3) status, it is automatically exempt from state income tax. To obtain a Sales Tax Exemption complete the REV-72 Sales Tax Exemption Application Form obtainable on the Pennsylvania Department of Revenue’s website at this URL: (https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/SUT/Documents/rev-72.pdf). Email the completed form to the address listed on the form. Renewal every 5 years is required.
o References: [A, D, S]
17. Register for Charitable Solicitation
o This is another very important step if the NPO is to receive donations. Before any soliciting, the organization will need to be registered in Pennsylvania as well as any other state whose residents will be solicited. Register through the Pennsylvania Department of State’s Bureau of Corporations and Charitable Organizations – Charities Section website at the following URL: (https://www.dos.pa.gov/BusinessCharities/Charities/Pages/default.aspx). This page includes the necessary forms, information, and instructions. It will be necessary to determine whether the NPO needs to register with the Charitable Organization Registration Forms or the Purely Public Charity Registration Forms. They may be filed online or by mail.
o References: [A, D, T]
18. Obtain Other Business Licenses and Permits
o Depending on what activities will be conducted further licenses and permits may be required to obtain. For example if putting on an event where alcoholic beverages are sold, a Special Occasions Permit is required from the Pennsylvania Liquor Control Board (https://www.lcb.pa.gov/Licensing/Topics-of-Interest/Pages/Special-Occasion-Permits.aspx). Other licenses in other scenarios may also be needed, so keep this in mind, and check this website for more examples (https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits).
o References: [A, U, V, W]
References:
A) https://www.harborcompliance.com/information/how-to-start-a-non-profit-organization-in-pennsylvania
B) https://www.corporations.pa.gov/search/corpsearch
D) https://docs.google.com/document/d/1DaEZPQXg3oCMuM4u4Hp6IIOBA7nME3THenfVd-1JgMU/edit
E) https://www.harborcompliance.com/information/pa-docketing-statement
F) https://www.dos.pa.gov/BusinessCharities/Business/RegistrationForms/Pages/default.aspx
G) https://www.zenbusiness.com/initial-reports/
H) https://www.irs.gov/forms-pubs/about-form-ss-4
I) https://www.harborcompliance.com/information/conflict-of-interest-policy
J) https://www.revenue.pa.gov/Pages/default.aspx
K) https://www.irs.gov/forms-pubs/about-form-1023
L) https://www.irs.gov/pub/irs-pdf/i1023.pdf
M) https://www.nfib.com/content/resources/alabama/does-your-small-business-need-a-duns-number-73029/
N) https://www.dnb.com/duns-number/get-a-duns.html
O) https://www.nrcs.usda.gov/wps/portal/nrcs/detailfull/national/programs/?cid=stelprdb1257063
P) https://sam.gov/content/home
Q) https://www.pa100.state.pa.us/AboutPA100/GeneralInstructions
R) https://www.pa100.state.pa.us
S) https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/SUT/Documents/rev-72.pdf
T) https://www.dos.pa.gov/BusinessCharities/Charities/Pages/default.aspx
U) https://www.lcb.pa.gov/Licensing/Topics-of-Interest/Pages/Special-Occasion-Permits.aspx
V) https://montco.today/2016/06/new-pa-liquor-law-huge-windfall-nonprofits-heres/
W) https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits
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