Your Name required. Your Email required. Your Phone Number required. Your Question. Send me your Monthly Newsletter. Skip to content. Churches, Ministries and Religious Organizations. Are you starting a c3 Church, Ministry, Mission. We cover all areas of c nonprofit legal needs. If you have questions about our services, or you would like to schedule an appointment to discuss how we can serve you, please contact us anytime. In some states, religious nonprofits use special formation forms and follow slightly different rules for governance than other charities such as giving the congregation the right to elect the directors.
If your organization plans on pursuing tax-exempt status to avoid corporate tax and to accept tax-deductible donations, it is important to determine whether the IRS classifies your organization as a "church" which includes a variety of congregations , or simply a religious organization.
If your organization is a church, your nonprofit is automatically tax-exempt and you do not have to submit an application or annual tax filings to the IRS. If your organization is not a church, but you are a charity with a religious purpose, don't worry—although exemption is not automatic, your tax-exempt status is secure once you've established it and your reporting requirements will be the same as other nonprofits.
If your organization is a place of worship, your nonprofit might meet the IRS's definition of a "church" and enjoy automatic tax-exemption. According to the IRS, churches include a variety of places of worship such as temples, synagogues, and mosques, as well as associations of churches.
Some of the characteristics the IRS looks for when determining whether the organization is a church include:. If your organization has many but not all of the above characteristics, the IRS still might deem your nonprofit a church.
For example, if your organization follows a recognized creed, has ordained ministers, and holds weekly services, but you do not have a school, you will likely pass the test. In contrast, if your organization is a homeless shelter that employs ordained ministers, but does not have a place of worship or religious services, it is likely not a church. If you have questions about your organization, consider submitting an application for c 3 status as discussed above , consulting with an attorney, or both.
Check the laws of your state to determine the requirements and paperwork for religious nonprofits, which might be different from other charities. Typically, the rules regarding religious nonprofits apply to all organizations with a religious purpose. However, some states have regulations that pertain only to "churches" as defined by the IRS , or organizations structured exclusively for religious purposes as opposed to nonprofits with missions that include non-religious purposes like education.
After you verify that your state classifies your organization as a religious nonprofit, review the operational and formation requirements. For example, your state might require religious nonprofits to have a minimum of one director, and other charities to have a minimum of three. In addition, some states have two types of formation forms such as articles of incorporation : one for religious nonprofits, and one for non-religious nonprofits.
If your nonprofit is a place of worship, your state might require your organization to be a "membership" nonprofit. If so, you'll need to determine who will serve as your members. Membership nonprofits have voting members who have the right to participate in internal matters, such as who will serve on the board of directors. In some states, the law provides that the congregation will serve as the members unless the nonprofit's bylaws state otherwise.
I often get asked whether or not churches both established and church plants need to file with the State and the IRS to become a nonprofit organization. The short answer is no. Churches, by definition, are already nonprofit organizations. However, many churches find that it is still in their best interest to apply to the IRS and become a registered c 3 nonprofit organization. As churches grow and seek to serve through a variety of ministries that reach the community, leadership teams may want to think about registering with the IRS.
Doing so will enable the church to solicit outside funding to support the ministry including grants from government and foundation sources.
Establishing a new, separate organization will also enable the financial records of the ministry and the church to be kept completely separate. On the other hand, when the decision is made, church members may feel that they no longer need to support the ministry.
Running two separate organizations can be costly as well; registered nonprofits must file a with the IRS each year; this tax form for nonprofits is usually completed by an accountant.
It is also a good idea to have an independent audit each year to verify to supporters that the organization is operating under Generally Accepted Accounting Principles GAAP.
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