Section 501(c) of the United States Internal Revenue Code states that there are 29 types of non-profits that can be exempt from federal income taxes. Section 503 sets out the requirements for meeting the exemptions. A 501(c)(3) organization is a tax-exempt nonprofit organization and one of the most common types of tax-exempt organizations. Becoming a 501(c)(3) non-profit is an essential tool to starting a non-profit. It is a critical step in operating a non-profit business, as well as, seeking grants or tax-exemptions. In today’s blog, we will discuss three reasons why it is important for your non-profit to receive their 501(c)(3) status.
Eligible for Grants
To apply for a grant on a federal, state, or local level, they require that you are a 501(c)(3) organization. By having 501(c)(3) status, you will be given a certificate of proof. This certificate will allow you to be considered to receive fundraising that other organizations cannot.
Exemption from Federal Income Tax
One of the biggest reasons you need your 501(c)(3) status is that you receive special tax exemptions. This means that your organization is exempt from federal, state, and property taxes. You may even be exempt from payroll taxes if you have employees. Having this advantage saves your organization money, which is a plus to any non-profit.
As a 501(c)(3) organization you receive extra perks. The extra perks usually include special mailing services, free or discounted media outlets or services, and much more. Many media outlets often give free rates for non-profit organizations. When planning to use these services make sure to tell them in advance that you are a 501(c)(3) .
Understanding that many non-profits are overwhelmed by this process, CharityNet USA has created services that are aimed at making the 501(c)(3) process as simple as possible. CharityNet USA’s mission is to provide products, services, and solutions to non-profits, while helping them start and grow their organization. As the nation’s leading non-profit resource center, CharityNet USA provides a “one stop shop” for business products, services, and solutions. Their specialty is helping organizations or startups with all administrative services, including marketing, accounting, web development, translation, and more. Their experts will be with you throughout the journey to ensure that your dream becomes a reality.