From time to time we are asked by organization officials when they are initially creating their accounts whether they should sign up as a place of worship or charity.
We strive to make giving easier than it’s ever been with the Givelify donation app. Signing up your organization should be just as easy. If you’re just getting started with Givelify and are unsure which category your organization falls under, here’s what you need to know.
Are You a Place or a Thing?
When signing up to fundraise with the Givelify donation app, the easiest way to determine your category is to ask this question: are we an organization or a place people go? Both places of worship and nonprofits are 501(c)3 public charities that re-invest all donations into their purposes.
The main difference is that a charity may not necessarily be associated with a physical location. A place of worship is literally that: a place.
The nonprofit category does include faith-based and religious organizations, but these organizations may or may not be affiliated with a particular church or denomination and are not actually places of worship.
What Is Your Main Purpose?
While the difference between being a “place” or a “thing” may seem black and white, there are some exceptions to the rule. If you still aren’t quite sure where you fit, try asking yourself this question: what is my organization’s main purpose?
Is your organization a religious ministry, or was it created to raise money for the less fortunate? Does it exist to produce or participate in worship services, or is its main goal to support a charitable cause?
For example, a traveling pastor or music ministry may not be a “place,” but in Givelify you will still want to sign up as a place of worship. On the other hand, a faith-based 501(c)3 organization that raises funds for disadvantaged children would sign up as a charity.
What the I.R.S. Says
One important distinction between places of worship and nonprofits is that the former must adhere to a set of criteria above and beyond other nonprofits. The post What’s the Difference Between a Church and a Religious Organization? on The Balance outlines exactly what the I.R.S. defines as a place of worship:
- A distinct legal existence
- A recognized creed and form of worship
- A definite and distinct ecclesiastical government
- A formal code of doctrine and discipline
- A religious history
- Members that are not associated with any other church or denomination
- Ordained ministers who have completed specific studies
- A literature of its own
- Established places of worship
- Regular congregations
- Regular religious services
- Sunday schools for religious teaching of children
- Schools that educate its ministers
As long as most of these criteria are met, a place of worship is automatically classified as a 501(c)3 without necessarily having to apply for tax-exempt status. In the interest of transparency many places of worship file with the I.R.S. anyway, but it is not required. It is required for a nonprofit to file.
Still Have Questions?
If you are signing up your organization with Givelify and still have questions, we’re always happy to help. Contact us and we’ll get you squared away.