Quick Summary
Pennsylvania’s Act 104 of 2026 raises the annual contribution thresholds that determine whether a charitable organization needs an audit, review or compilation, including a new $1 million trigger for an independent audit. It takes effect February 19, 2027, but grant, debt, donor, governance and multistate requirements may still call for the current level of assurance.
Key Takeaway: Act 104 of 2026 gives certain Pennsylvania charitable organizations greater flexibility, but organizations should confirm the transition timing and consider other requirements before changing their current level of assurance.
Pennsylvania has increased the annual contribution thresholds that determine whether certain charitable organizations must obtain an audit, review, or compilation. These changes may reduce compliance costs for smaller and midsized organizations while preserving the Commonwealth’s financial accountability framework. The trend mirrors the federal government’s recent increase to the Single Audit threshold.
New Reporting Thresholds
Governor Josh Shapiro signed Act 104 of 2026, formerly Senate Bill 1183, into law on October 22, 2026. This act was championed by Pennsylvania Sens. Lynda Schlegel Culver (R-Northumberland) and Nick Pisciottano, CPA-inactive (D-Allegheny). The law amends Pennsylvania’s Solicitation of Funds for Charitable Purposes Act as follows:
| Annual contributions | Requirement under Act 104 |
|---|---|
| $1 million or more | Independent audit |
| $500,000 to less than $1 million | Review or audit |
| $150,000 to less than $500,000 | Compilation, review, or audit |
| Less than $150,000 | Compilation, review, or audit is optional |
How the Thresholds Changed
- Organizations with $750,000 to $999,999 in annual contributions may move from a required audit to a review.
- Organizations with $250,000 to $499,999 may move from a required review to a compilation.
- Organizations with $100,000 to $149,999 will no longer be required to obtain a compilation under these provisions.
Previously, Pennsylvania required an audit at $750,000 or more, a review or audit from $250,000 to less than $750,000, and a compilation, review, or audit from $100,000 to less than $250,000 in annual contributions.
The audit threshold change also aligns with recent changes to the Single Audit requirement at the federal level, which raised the threshold from $750,000 to $1 million.
Effective Date and Transition
Act 104 takes effect February 19, 2027, 120 days after enactment. The legislation states that it applies to contributions received in calendar years after the effective date. Because this language is tied to calendar years rather than expressly to fiscal years or registration filing dates, organizations, particularly those with non-calendar year-ends, should confirm the applicable reporting period before changing an engagement.
An Audit, Review, or Compilation May Still Be Required
While the new Pennsylvania thresholds affect requirements under the state’s charitable solicitation law, an audit, review, or compilation may still be required or expected under:
- Federal or state grant agreements and federal Single Audit requirements
- Debt agreements or governmental contracts that may mandate a certain level of assurance
- Foundation, donor, or other funding requirements
- Organizational bylaws, board policies, or governance expectations
- Charitable registration requirements in other states, which may have different thresholds
Please remember that these thresholds are based on annual contributions, not necessarily total revenue or the organization’s operating budget. We encourage you to monitor the new thresholds carefully and to connect proactively with your independent accountant if your donor contributions change significantly.
Recommended Next Steps
Before changing their current level of assurance, organizations should consider the steps below. Your organization may have additional considerations not listed here, so we encourage a thorough discussion with your management team and board before making any change.
- Confirm the organization’s annual contribution amount under Pennsylvania’s rules.
- Identify the level of service permitted under the new threshold.
- Carefully review grant, debt, contract, governance, and multistate registration requirements to determine the applicable reporting thresholds and assurance requirements.
- Discuss transition timing with the organization’s independent accountant and legal counsel before modifying an existing engagement.
- Consider whether an audit remains valuable to the board, lenders, donors, funders, or other stakeholders, even if Pennsylvania no longer requires it.
The Schneider Downs Not-for-Profit industry group serves the organizations that serve our communities, with assurance, tax, advisory and technology solutions built for mission-driven work. We understand that not-for-profits answer to boards, donors, grantors and the public at once, and we help you meet every one of those obligations with confidence. To learn more, visit our Not-for-Profit Industry Group page or our Audit & Assurance page, or contact us, or email us directly.
