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Nonprofit Archives

Should Churches Seek 501(c)(3) Nonprofit Status?

As an attorney representing churches, I have had this question come up a number of times over the years. Should our church seek Section 501(c)(3) nonprofit status? My initial response is usually, "why would you want to do that?" As a church, you are already deemed to be a de facto charitable organization in the sense that you are exempt from taxes and you can take tax-deductible donations. These are the two primary reasons an organization would seek 501(c)(3) status. As churches, you are also constitutionally shielded from government scrutiny, so you don't have to worry about annual reporting to the federal or state government. So you now have the best of both worlds.