Commonly known by its IRS code designation, 501(c)3 is a tax exempt status bestowed by the IRS upon your nonprofit organization. It’s regulated and administered by the US Department of Treasury through the IRS. It’s primary benefit is that donations are tax deductible to your donors.
Benefits aside, there’s a reason so many nonprofits find this the hardest part of the journey to starting and operating their nonprofit organization over the long haul.
The daunting process of filing your IRS Form 1023 Application for 501(c)3 Tax Exempt Status is the subject of many thick books, and commands fees of up to $5,000 or more through attorneys.
The process can vary in difficulty based upon factors including your projected budget and a number of other variables. The main thing the IRS is on the lookout for is any “red flags”, often an innocuous or poorly articulated policy or activity that could indicate the possibility of your nonprofit organization being used improperly in a way that would “inure benefit to any individual or corporation”.
Additionally, there are numerous hidden requirements that must be acknowledged on your 501(c)3 application that can make the journey feel like a never ending maze with few straight answers and an insanely long approval process. Frustrating.
That said, don’t let the process intimidate you. You’ve got options. We’re experts in overcoming these obstacles and we’ll help you navigate the 501(c)3 application landmines.
If you want a zero brain damage, one stop shop to get your 501(c)3 status quickly at a fraction of the cost of typical professional service firms, then check out our Yippiekiyay online platform. If you’d like to chat further about the details, then schedule a free consult call with one of our concierges here.
One of the most distinct benefits unique to 501(c)3 organizations is the tax deductibility of donations. Your donors receive a federal income tax deduction for the charitable contributions they make to your nonprofit organization.
This allows you to attract more amazing people to your mission and get the financial support needed to truly make an impact.
Additional benefits vary by state, and most states allow for deductibility for state income tax purposes. Also, many states allow 501(c)3 nonprofits to be exempt from sales tax on purchases, as well as exemption from property taxes.
And last, but not least, special nonprofit, bulk rate postage discounts are available from the Post Office for qualified organization
You’re in great company. According to BoardSource, the United States is home to more than 1.6 million nonprofit organizations.
That’s a lot of people out improving their corners of the world.
Nonprofits provide a variety of services to the public, including feeding the homeless, tutoring children and providing scholarships.
The 4 most common types of nonprofit organizations are public charities, foundations, social advocacy groups and trade organizations.
Let’s take a look at each one….
If shouldn’t be hard to do good. And, you shouldn’t have to waste your time and money trying to figure all of this out. Our mission is to help nonprofit heroes with our online platform by eliminating the barriers to 501(c)3 formation and state and federal compliance so they can get on with saving the world.
We’re happy to help wherever you are on the journey. You’re welcome to schedule a free consult call here to get your questions answered. (Take advantage. Our concierges are awesome people and experts in the industry. They’ve got you covered.)
To your mission,
Jacqui Long | Conjuror of Comms & Culture | Yippiekiyay Nonprofit Solutions