Establishing a 501(c)(3) Organization
Many community- and faith-based organizations disqualify themselves from receiving certain funding because they lack 501(c)(3) status as recognized by the Internal Revenue Service. Among others, establishing your organization as a nonprofit under 501(c)(3) offers several benefits including lower postal rates on all mailings, tax-free and exempt status from Federal taxation on contributions made to your organization, and discounted hosting space from Internet service providers.
Organizations described in the Internal Revenue Code Section 501(c)(3) are often referred to as "charitable" and "nonprofit" organizations. A common misconception about nonprofits organized under 501(c)(3) is that such groups are prohibited from making a profit. Contrary to this misconception, a nonprofit organization can make a profit. Rather, as a 501(c)(3) nonprofit, members of such an organization are precluded from benefiting from earned profits. Moreover, nonprofits are encouraged to govern themselves as businesses seeking to make a profit. Learn more about 501(c)(3) status and how to obtain this status for your own nonprofit organization at http://www.irs.gov/pub/irs-pdf/p557.pdf.
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