Advice for Religious Entrepreneurs

Startup Requirements for a Religious Organization

In some ways, religious organizations are similar to small businesses. But as a religious startup, there are several additional hoops you will need to jump through, especially if you want to ensure the tax deductibility of donor contributions.

Most religious organizations elect to pursue nonprofit incorporation.

Startup Requirements for a Religious Organization

Unless your startup is part of a religious denomination, the nonprofit incorporation process begins with drafting articles and bylaws, creating a governing board and filing papers with the state. This process can take several months, but once it's complete you'll need to maintain the organization just like any other nonprofit corporation.

During the startup phase, you will also need to apply for a federal employer ID number, state tax exemption and other details. Although it's possible to establish a nonprofit religious organization on your own, it's helpful to enlist the assistance of an attorney or consultant to walk you through the process.

Keep in mind that as a recognized, tax-exempt religious organization, your startup will be subject to restrictions that don't apply to non-exempt organizations. For example, blatant participation in the promotion of a political candidate or party can jeopardize your status and send your donors scrambling for the door.

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