Category Archives: Church Growth

NONPROFITS 501(c) 3’s AND THE CHURCH

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501(c)3 and Churches
Years ago the government established that all churches were exempt from taxes and excessive government interference and that all churches are naturally nonprofit entities, as churches are afforded exemption through the US Constitution. However, the government has created a voluntary status known as 501(c)3. 501(c)3 is required for all non-church or parachurch organizations, but churches are not required to comply or register as a 501(c)3 Church. In my opinion, and in the opinion of many others, there are:
Disadvantages of 501(c)3 Status for Churches
Political Restrictions:

  • Politics and the Pulpit: 501c3 churches cannot support or oppose any political candidate. Political agendas are frowned upon. 501(c)3’s must refrain from political activity keeping it out of church events and communications.
  • Lobbying Limits: Churches are allowed to be involved in limited lobbying efforts. However, in 501(c)3 status lobbying can jeopardize their tax-exempt status.
    Transparency and Reporting Requirements:
  • 501(c)3 Churches have government form filing requirements, like the IRS form 990. Non 501(c)3 Churches do not. The government should not be involved in church financial oversight.
  • 501(c)3 Church status is the beginning of a government church.

  • Potential Loss of Control:
  • 501(c)3 Churches and Government Oversight. The potential for federal government interference exists in 501(c)3 Churches, especially if there’s a perceived deviation from exempt purposes.
  • Faith and Function: The potential to be challenged over specific religious practices or teachings is real, especially if they conflict with certain regulations. This includes sexual orientation, equity, hiring restrictions, and other aspects. Church must preserve the sanctity of a place for worship without social encumbrances.
    Restrictions on Business Activities:
  • Fundraising: 501(c)3 Churches need to ensure fundraising events comply with “exempt purposes.” Bake sales are usually fine, but a for-profit concert, conference, or other gathering could create problems.

This information was taken from internet articles and rewritten for your consideration.