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Why are some churches considered
nonprofit organizations?

In the United States, any legitimate group of religious people can file the appropriate documents with their secretary of state, to incorporate as a nonprofit religious organization. The state will require evidence of the religious nature of the group, articles of incorporation, a corporate constitution and bylaws, and a board of directors (usually with the assistance of an attorney).

The primary reason for this incorporation, is so that a 501(c)(3) tax exempt status from the Internal Revenue Service can be secured that will exempt the church from paying taxes on its offerings and property, and will provide a tax exemption to the organization's donors. The incorporation also serves to protect private individuals in the church from incurring personal liability in the organization's behalf. Whenever a church becomes such a corporation, it is required by law to keep detailed records of donations and financial records so to prove the nonprofit intent of the organization and to protect the intended purpose of the donor's offerings. Violations of related laws can result in revocation of a church's non profit status.

Section 501 (c) (3) of the IRS code describes what the government considers to be an eligible nonprofit, religious group. "A tax-exempt religious organization is a legal entity or vehicle created and operated exclusively for religious purposes, no part of the net earnings of which insures to the benefit of any private individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which does not participate in or interfere in any political campaign on behalf of any candidate for public office."

Most churches are incorporated as nonprofit organizations, but there is no scriptural edict that requires any such status or any recognition from secular government. Some have contended that if persons regain their donation in the form of deducted taxes, it diminishes the sacrificial value of the original offering (2 Sam. 24:24). However, the tax exemption status has generally been viewed as one of God's great blessings to the American church, enabling it to direct greater sums to evangelism, benevolence, and foreign mission fields.

This article is from the book, What People Ask About the Church, authored and copyrighted © by Dr. Dale A. Robbins, 1990-2015, and is a publication of Victorious Publications, Grass Valley, CA - Nashville, TN. Unless otherwise stated, all scripture references were taken from The New King James Bible, © Thomas Nelson Inc., 1982. You may download this article for personal use as long as you retain credit to the author. Obtain permission before reproducing copies for any reason, by filling out our simple permission form. Many of our writings are also available as free pdf tri-fold pamphlets, which can be downloaded for reproduction from our Online Catalog. For media reproduction rights, or to obtain quantities of this title in other formats, email us.