In this episode of the Church Planters Ask Podcast, host Danny Parmelee answers the question, “How Do I Get 501(c)3 Non-Profit Status?”
Here’s the two main reasons why obtaining 501(c)3 status is important for your church plant:
1. This will allow people to donate to your church and receive a tax benefit. I know that people’s motivation for giving should be generosity and gospel overflow, but trust me, people giving significant amounts of money are going to want to take a tax deduction.
2. This might not affect you until later on in your church plant, but 501(c)3 status paves the way for you to own a building without paying property taxes. Pretty much all local and state entities are going to require you to be recognized as 501(c)3 to get off their tax rolls.
Its not the main purpose, but you’ll also find that being a 501c3 will also open up doors to other grants, which we will talk about in other episodes.
If you are part of a network or denomination, you may not need to file a full application.
It’s called 501(c)3 Umbrella. This means larger organizations that have a 501(c)3 can have organizations under their umbrella.
The process to be included under the umbrella is fairly simple and shouldn’t take you more than a couple minutes writing a letter to be requested and then the network to add your name to the list. And there is not a cost to do this. You will have to have already obtained your EIN, which we discussed is episode 4.
The other added benefit of being in a 501(c)3 umbrella is that you don’t have to file yearly 990 tax forms with the IRS. You literally do nothing to maintain your status.
If you are not currently part of a church planting network or organization, please do reach out here.
If you are adamant about going for 501(c)3 coverage without being under a larger organizational umbrella, we discuss the pros and cons as well as how to best achieve this goal with Joe Grier. Listen to the episode at the link above!
Guest Joe Grier has been a church planter and pastor for many years. Because of his experience as a missionary, pastor, and non profit board member he has filled out many 501c3 non profit applications. He is currently on the board for Transition One. Transition One is a gap year school for students between the ages of 18-23 who want to take one year to put God first and seek His kingdom. They offer six months classroom experience and a three-month foreign missions outreach. The missions component gives the student an opportunity to put into practice skills he or she has learned in the classroom. The curriculum covers leadership skills, revisits the Christian basics, basic personal financial management, teaching in world religions and background in the cults, basic Christian doctrine and hermeneutics, workplace skills, relationships between the sexes, basic theology of missions and the importance of serving in one’s community, along with many other topics. Students practice personal devotions, journaling, group prayer, team building and community service along with serving in a local church setting each week. If you would like to get in touch with Joe you can reach him at firstname.lastname@example.org