08/23/2026
Honorary vs. Earned 501c3 status
Each month I choose a topic from the nonprofit sector to focus my daily posts.
This month I decided to answer the question: “Why churches need an “earned” 501(c)(3) status?”
As anticipated, the comments have been very interesting and informative.
For many years, investors, business owners, grant funders, philanthropists, and others invested in the church for public recognition.
They wanted to be recognized for supporting the church to hone respect and goodwill in the community with the ultimate goal of getting more business or other ROI.
Unfortunately, the church (in general, not your specific church) is not viewed as a good investment per se.
Due to scandals, the negative image of the “mega” church, financial mismanagement, and lack of community service, the people who use to view investing in churches as wise investments that would generate good ROI, have changed their minds.
The IRS gives churches an “honorary” 501c3 designation because churches serve a religious purpose.
However, grant funders, investors, philanthropists, business people and others who need to write off significant financial investments for tax purposes, simply don’t view the “honorary” 501c3 as credible.
Instead, these people prefer to invest in churches with an “earned” 501c3 status that you receive after the IRS approves an official Form 1023 application.
For example, church leaders who need grant money to build a playground or to offer financial literacy programs, or any outreach community services could use their “earned” 501c3 status to apply for grant money.
Churches with the “honorary” 501c3 status can’t apply for grant money if the funder requires an “earned” 501c3 status because the applicant would not be able to access the grant portal.
You can only access a grant portal if the EIN is attached to an earned 501c3 status. So, when you type the EIN into the grant portal and submit, it’s automatically sent to the IRS to verify the type of EIN.
If the EIN is not attached to an “earned” 501c3 status, an error message will appear instructing you to apply for 501c3 status. You can’t even get to the grant application to apply for the money.
So, if your church needs money to offer community services, improve your church facilities, or avoid paying property taxes, I highly encourage you to complete a survey to compete for my offer to complete the application process for free!
GRAND PRIZE!
I’m celebrating 23 years as a professional nonprofit consultant this month!
As a token of my appreciation, I’m offering church leaders, other religious leaders, and individuals to complete a survey to compete for a grand prize which includes the following:
1) I’ll complete your 501c3 application packet for free!
2) I’ll complete the application to file the Articles of Incorporation with the state and pay the fee.
3) I’ll pay the $600 IRS application processing fee!
This GRAND PRIZE is worth approximately $3,800!
But that’s not all ..
If you complete the survey, you automatically get 50% Off my online courses and a special gift.
The survey is due on August 31!
So, if you want to earn 501c3 nonprofit status for your church or other entity, please complete the survey using the link below:
https://trustsusanwoods.com/grand-prize/
Thank you!
Susan
GRAND PRIZE Win a chance to get your nonprofit application completed for free! Learn more >> Welcome to your opportunity to win a chance to get your 501(c)(3) start-up or reinstatement nonpro…
