What is 501(c)(3) Tax Exemption?
When you’ve begun the process of starting a nonprofit, one of the first questions you encounter is: what is a 501(c)(3), and how can it help my organization?
The recognition of your organization as a 501(c)(3) tax-exempt entity by the Internal Revenue Service (IRS) offers many advantages in helping your organization receive donations and establish credibility. Primarily, having an active 501(c)(3) status allows donors to receive a tax deduction, provides grant funding eligibility for the nonprofit, potential tax exemption at both state and federal level.
Here at BryteBridge, we can help you gain active exempt status with the IRS, guaranteed. We are one of the nation’s top 501(c)(3) service providers, helping over 35,000 nonprofits move forward successfully. In fact, we help close to 3% of nonprofits that get started each year in the United States. Get the help you need with your IRS 501(c)(3) application preparation from our dedicated nonprofit team.
501(c)(3) Tax Exemption Benefits
Get Advice From 501(C)(3) Formation Experts!
No Complicated IRS & State Paperwork
The IRS estimates the start-up process to be 70-100 hours of work if you don’t know what you’re doing. We can complete the entire process in 10-15 days. Even Faster if you needed it expedited.
Access to Grants
Once you receive your 501(c)(3) tax-exempt status, you are eligible for grant funding to help maximize your funding opportunities.
Guaranteed 501(c)(3) Status
After helping 35,000 nonprofits obtain their 501(c)(3), we are confident in guaranteeing our work, or we will offer a 100% refund.
We Help You Obtain 501(C)(3) Tax Exempt Status With The IRS
At BryteBridge, we help you understand what a 501c3 is, and offer dependable 501c3 document preparation for nonprofit organizations at a fair price. If you need help with understanding the requirements to start a nonprofit, our professional team of consultants can prepare all of the necessary documentation to secure your organization’s tax-exempt status from the IRS.
Our services include Form 1023, Form 1023-EZ, Financials, Articles of Incorporation, EIN or Tax ID#, Bylaws, State Tax Exemption, Charity Registration, Corporate Book & Seal, Conflict of Interest Policy, Foreign Registration, Group Exemption, Fictitious Names (DBA) and State Annual Reports. We also can review your organizing documents, assist with follow up with the IRS in response to official correspondence, and even assist with other 501(c) designations.
BryteBridge is your reliable partner when you want to know what steps are needed to make your organization a 501c3 tax-exempt entity. Our passion is to help your nonprofit succeed.
Streamline your 501(c)(3) Nonprofit Formation
The 501(c)(3) tax exemption process can be extremely complex and difficult to follow. You do not want your organization to be at risk due to inexperienced volunteers or companies processing your IRS Form 1023 & IRS 1023 EZ. If done improperly, the processing of your 501(c)(3) status and 501(c)(3) application can be delayed for months. Here at BryteBridge, we work with clients nationwide, having filing expertise in all 50 states and U.S. territories.
Moreover, we guarantee approval of the 501(c)(3) status, and work fast to get quick approval for your nonprofit organization. In some cases, we have assisted nonprofits in receiving their status in less than 30 days. Allow our skilled consultants to complete the necessary documents for your nonprofit. Count on our nonprofit solutions for all your needs. From helping you understand what a 501(c)(3) is to incorporation and launching your website to receive donations, we know how to fast-track your growth.
501(c)(3) Tax Exempt Requirements
Your Nonprofit Deserves a Great Start!
Price Match Promise
If you find a current lower price within 30 days after purchase, provide the proof, and we will adjust your payment to the lower price or provide a credit toward other services. Additionally, we will provide a $50.00 credit toward a future service of $250 or greater.
Working with the BryteBridge professionals, you have experts by your side. Our Consultants and Specialists have 8+ years of experience working with nonprofits. holding board positions, or with formal nonprofit educational backgrounds.
We prepare and file your documents in a timely manner, Incorporating in just a couple of days and filing your 501(c)(3) within 10-15 days. We also offer expedited options.
We understand that this process can be difficult, and you may need assistance starting a nonprofit. Our qualified nonprofit consultants and advisors have extensive experience in nonprofit formation and can help you navigate many of the common concerns new nonprofits face, including:
- How long does it take to receive my 501(c)(3) approval from the IRS?
- Can I solicit the public for donations while I wait for the 501(c)(3) is approved?
- Can I put myself on a salary. How does that work?
- Can my board members receive a salary?
- If I start with the 1023 EZ application for my 501(c)(3) and then make more than $50,000, what happens?
- What is the difference between a Private Foundation and a Public Charity?
- Can I get a grant to start my nonprofit?
- Can I pay myself back for this startup purchase?
BryteBridge is your one-stop resource center to Start a 501(c)(3) Nonprofit and Keep your 501(C)(3) in Compliance with the IRS and State.
501(c)(3) Start-up Pricing
You might be asking, How much does it cost to start a 501c(c)(3) Nonprofit. BryteBridge makes it easy to start a 501(c)(3) , through three starter service options. Our 501(c)3 Comprehensive services include everything you need to incorporate, obtain 501(c)3 status, and meet initial state nonprofit operating requirements. Starting your nonprofit shouldn’t break the budget. Checkout our Price Match Promise!
- Everything necessary to start a nonprofit organization. Let our experts take care of the time-consuming incorporation and 501(c)(3) application process so you can focus on the organization’s mission.
- 501(c)(3) Approval Guarantee
- Nonprofit Consultation*
- Nonprofit Platform
- Name Verification
- Nonprofit Incorporation
- EIN Tax ID
- 501(c)(3) Filing IRS 1023 Form
- Price Match Promise
- Conflict of Interest Policy
- Bylaws Aligned to IRS Requirements
- Banking Resolution
- Financial Budget Template
- Pending 501(c)(3) Letter
- Educational Guides*
- Unlimited Email Support
- The ideal solution to launch a growth-focused nonprofit and start accepting donations. In addition to incorporation and 501(c)(3) applications, our team files the necessary paperwork to register as a charity in your state.
- Everything in the Essentials Plus...
- Charity Registration*
- 1 Year Registered Agent ($129 Value)
- 1 30-Minute Support Call*
- The perfect solution to let our team of experts handle everything. In addition to taking care of the administrative filings, we provide a dedicated concierge service that includes coaching calls, premium support, expedited service, and a collection of our best practice guides and templates to launch your organization. Education material focuses on Board Management, Volunteer Engagement, and Fundraising Practices.
- Everything in the Growth Plus...
- Expedited Services
- State Sales Tax Exemption*
- State Income Tax Exemption*
- 1st Year 990-N ($149 Value)
- 2 30-Minute Support Calls*
- Live Monthly Q&A Webinars*
- Board Management Guides
- Board Management Agreements
- Board Management Applications
- Volunteer Guide and Templates
- Fundraising Guides
- Donor Letter Templates
*Registered Agent Services ($129 Value) included with Complete Compliance & Complete Concierge packages automatically opt-in free of charge for the 1st Year. The $129 Annual fee will be auto-charged unless opted out before the renewal date.
After you purchase, it’s just three easy steps!
Learn More About Our Features Below
501(c)3 Approval Guarantee
We guarantee your 501(c)(3) tax-exempt status will be granted by the IRS or we give your money back. We’ve helped over 45,000 nonprofit organizations and stand behind our work.
A nonprofit consultant will help you determine your start-up readiness level and appropriate 501 application and educate you on the best BryteBridge solutions for your organization.
IRS 1023 Form
We complete to be submitted for exemption from federal income tax under section 501(c)(3)
Important Start-Up Documents
We provide a collection of documents to support your organization. They include:
- Conflict of Interest Policy
- Banking Resolution
- Financial Projection Budget Template
- Pending 501(c)(3) Letter
Start your nonprofit education with a collection of our guides. They include:
- Board Member Giving Plan
- Building Your Brand Identity
- Donor Development, Life Cycle, and Recognition
Creation of your Nonprofit and articles “Charter” establishes your nonprofit in your home state.
EIN / Tax ID#
Obtain your Federal Tax Identification Number.
We research name availability in your state, prior to incorporation, to ensure the name you want is available.
For the full 1023 Form, the IRS requires actual or projected financial information (e.g., budget) for three years.
Most states require nonprofits to register with their Division of Charities prior to seeking donations.
State Tax Preparation
Some states require the state equivalent to IRS 501(c)(3) status to be corporate tax-exempt. California and Texas are especially complex.
Supporting Your Journey
- Unlimited online support through your Nonprofit Platform portal access to communicate important order updates and related questions.
- Customer Service: 1-877-857-9002 M-F 9 am-7 pm EST.
- Scheduled Consultations
Registered Agent Services
Our RA services ensure you do not miss important tax or legal documents mailed to your organization.
990-N Tax Preparation
We accurately and timely prepare your IRS Form 990-N upon completion of your first tax year.
Frequently Asked Questions about Starting a 501(c)(3)
A. Form 1023 is used to apply for exemption under IRS 501(c)(3).
A. Religious, charitable, scientific, testing for public safety, literary, educational, fostering amateur sports, or prevention of cruelty to children or animals.
A. On average the IRS takes 6-9 months from the time they receive the application package, however there are exceptions. Animal organizations tend to receive determinations quite quickly, and foreign or housing organizations may take an extended period of time. Doing it right the first time is critical, and that is where CharityNet’s experience helps. Also, if you are in a hurry our staff can assist with tips to help expedite the process.
A. Reg. l. 501(c)(3)-1(d)(2) provide that the term “charitable” is used in IRS 5Ol(c)(3) in its generally-accepted legal sense and includes relief of the poor and distressed or of the underprivileged; advancement of religion; advancement of education or science; erection or maintenance of public buildings, monuments, or works; lessening of the burdens of government; and/or promotion of social welfare.
A. For the IRS to approve an organization as a church, they must demonstrate that they have a set of distinct religious beliefs, a place of worship, regularly-scheduled services, and an established congregation. Lately the IRS has been requesting photographs of the church facility, the signage outside that invites the public to attend services, and the congregation at worship. In addition they have requested a list of members of the congregation, including names, addresses, and phone numbers.
A. Fostering Amateur Sports- Sports activity is not in and of itself an exempt activity under IRS 5Ol(c)(3). To qualify:
- An organization may be educational within the meaning of IRS 501(c)(3) if it teaches sports to youth or by being affiliated with an exempt educational organization. Such educational organizations may also provide facilities and equipment.
- An organization that develops, promotes, and regulates a sport for youths may be charitable within the meaning of IRS 5Ol(c)(3) as combating juvenile delinquency or lessening the burdens of government.
- The organization is organized and operated to foster national or international amateur sports competition and no part of its activities involve the provision of athletic facilities or equipment. (Think Olympic training).
A. The organizing document for the company; it states the organization’s specific purposes, incorporators, etc. The outline will vary from state to state.
A. Similar to Articles of Incorporation, but used for LLCs.
A. Internal operating rules for an organization; they state who should do what, how they should do it, when they should do it, etc. This basic nonprofit template discusses board duties and elections, memberships, meetings, etc.
A. If your organization has been operational for 5 years or more, then actual financial information for the last 5 years is required. If the organization has been in operation 1-4 years, we must have actual financial information for the periods of operation, and projected financials to include a total of 4 years of information. If the organization is a start-up, a 3-year projection is required.
A. Yes. However, the fees should be for provision of services which help to achieve the exempt purpose. These fees should be reduced in comparison with a commercial entity that may offer the same service. If fees are charged for any goods or services that do not directly involve the exempt services, the revenue may be subject to unrelated business income taxes.
A. Reg. 1.501(c)(3)-1(b)(l)(i) provide that an organization is organized exclusively for one or more exempt purposes only if its Articles of Organization: Limit the purposes of such organization to one or more exempt purposes; and do not expressly empower the organization to engage, other than as an insubstantial part of its activities, in activities which in themselves are not in furtherance of one or more exempt purposes. In addition, the organization’s assets must be dedicated to an exempt purpose, either by an express provision in its governing instrument or by operation of law. Reg. lRS 501(c)(3)-1(b)(4).
IRS 508(e) imposes additional requirements for governing instruments of private foundations. These are discussed in the Private Foundations Manual.
The term “articles” includes “the trust instrument, the corporate charter, the articles of association, or any other written instrument by which an organization is created.” Reg. 1.501(c)(3)-1(b)(2). The organizational test cannot be met by any document that is not the creating document.
A corporation’s bylaws cannot remedy a defect in its corporate charter. A charter can be amended only in accordance with the State’s nonprofit corporation law. States generally require that any amendments be filed with and approved by the chartering authority. In the case of a trust, operating rules cannot substitute for the trust indenture. For an unincorporated association, the test must be met by the basic creating document, whatever it is called, and any amendments. Subsidiary documents that are not amendments to the creating document may not be relied on.
A. The board is the governing body of the organization. In most nonprofits, the board does not participate in the daily operations of the organization. They must approve major organizational decisions, such as budget, salaries, amending articles or bylaws, etc. These individuals are there to ensure that the organization has the public’s interest at heart, and that all operations are done appropriately. Board functions must be offered on a volunteer basis. Board members may be recompensed for any out-of-pocket expenses. Sometimes, members of the board may also hold a day-to-day position in the organization. This is a separate position from that which they hold on the board. An individual who happens to be on the board may receive compensation for their daily role in the organization.
A. 501 Board Requirements: You must have at least 3 individuals – President, Secretary, Treasurer.
A. Yes, however there must always be a majority of “uninterested” individuals on the board. This means unrelated by blood, marriage, adoption, or business, and not receiving compensation for any reason.
A. Members of the board, award committee, or their family members should not be eligible to receive funding.
A. To remain in compliance, the organization must submit a Form 990 each year. This form (which comes in a variety of formats depending on the organization’s specific financial situation) must be submitted following the end of the fiscal year. Each year, the organization must file annual reports with their state to ensure that the corporation remains in good standing.
A. Most states require nonprofit organizations to register with the Attorney General or Department of Consumer Services before soliciting donations from the public. This ensures that all organizations requesting donations are in fact legitimate.
A. Not necessarily, but it is a good idea. This will prevent your organization from paying state level corporate and franchise taxes, freeing up more funds to put toward programs. In addition, sales tax exemption may be available to save you money on purchases made for the organization. The good news is the process is a lot simpler than federal tax exemption, however the state’s department of revenue may require you to first submit a copy of your IRS determination letter.
A. This varies by state. Some states will automatically exempt organizations that have been deemed exempt at the federal level. Other states require organizations to apply separately for state level exemptions.