SB 1183 Lowers Nonprofit Audit Threshold

What happened:  Senate Bill 1183, sponsored by Sen. Linda Schlegel Culver, advanced from committee — but with an amendment that kept the audit threshold at the existing level rather than raising it. As amended, the bill would require every charitable organization receiving annual contributions of $750,000 or more to be audited by an independent certified public accountant. The original bill had set the threshold at $1 million, which PANO supported. The bill now moves toward a full Senate vote. A companion bill in the House, Rep. Abigail Salisbury’s HB 965, has not received committee action. 

What current law already requires: Pennsylvania’s Solicitation of Funds for Charitable Purposes Act already establishes a tiered financial reporting structure based on annual gross receipts: 

• $25,000–$99,999: Internally prepared financial statements (or compiled, reviewed, or audited statements in lieu) 

• $100,000–$249,999: Compiled, reviewed, or audited financial statements 

• $250,000–$749,999: Reviewed or audited financial statements 

• $750,000 or more: Audited financial statements, performed by an independent licensed CPA 

SB 1183 does not change these thresholds. It codifies the existing $750,000 audit requirement more explicitly in statute. The practical impact is narrower than the bill’s framing suggests. 

PANO’s position: PANO supported the original version of this bill precisely because it would have raised the threshold — not maintained it. PANO recognizes the value of independent financial review and the importance of nonprofit transparency to donors, foundations, government partners, and the communities nonprofits serve. At the same time, PANO has long sought to balance the cost of annual audits with the protection they provide. Of the 21 states with fundraising registration-related audit requirements, six — nearly 30% — set their thresholds at $1 million or higher. Raising Pennsylvania’s threshold to $1 million would have provided meaningful cost relief for some organizations without compromising financial integrity. The amended bill does not accomplish that goal. 

It is also worth noting that the practical reach of any threshold change is limited: nonprofits that register to fundraise in multiple states must comply with the audit requirements of whichever state sets the lowest threshold — so organizations with multi-state registration often cannot take full advantage of Pennsylvania raising its own bar. Still, a higher threshold would have helped some single-state or primarily Pennsylvania-based organizations, and PANO continues to support that approach. 

You can review current Pennsylvania charitable organization financial reporting requirements at the PA Department of State’s charities page. 

What to watch: If SB 1183 advances through the full Senate at the $750,000 threshold, it will need to be reconciled with or replace HB 965 in the House. PANO will continue to advocate for a threshold increase and will share updates as both bills move forward.