Take advantage of our years of experience assisting ministries in obtaining 501(c)3 status under PCAI’s group status. We go to the limit to help you get started right in establishing a faithful and legal ministry.
Why You Need 501(c)3 status for Your Ministry
You entered ministry because it was your God-given calling. But, did you get started and realize there are also legal and tax issues to consider? Running a religious nonprofit requires more than just love for the Lord and your fellow man.
You may have sought out advice from an attorney or CPA only to find these professionals lacking adequate knowledge of IRS nonprofit regulations. Chartering religious organizations is actually quite a specialized field. That’s where we come in.
PCAI helps its members PROPERLY charter their religious organizations by requesting subordinate, or group exempt status. We are fully recognized by the IRS and have been working with religious organizations since 1976.
Charter specialists at our office will review your corporation or organizational papers and furnish information to help you qualify for nonprofit, tax-exempt status. If you have not started the process, we can do it all for you! We prepare your state nonprofit incorporation, set up your governing bylaws and obtain your employer identification number (EIN) from the IRS.
What might take your three years working alone, we can do in 30 days!
We urge you to have your religious organization properly evaluated, chartered and recognized by the IRS before you ask for donations. Please do not jeopardize your religious organization and reputation in the community by moving forward without a proper charter.
Frequently Asked Questions
1. What is a charter?
A charter is an official legal certificate/document issued to a religious organization upon approval. Such approval affords a religious organization legal standing with the community, the state, and the IRS; and is a prerequisite when applying for grants. This legal charter guarantees the recipient that his or her religious organization meets IRS criteria and is under general (not specific) supervision.
2. Is it really necessary to have a charter?
Any religious organization, evangelistic ministry, mission, etc. soliciting donations is a prime target for trouble if audited by the IRS. A non-exempt religious organization may be deemed liable and fined as an ordinary business for back taxes. Sadly, its contributors would also be charged for back taxes because of the organization’s failure to obtain a charter recognized by the IRS.
NOTE: Churches are automatically considered a 501(c)3 and they are not required to file for exempt status. Though, a church may choose to do so in order to receive specific benefits, i.e., public recognition of tax-exempt status, advance assurance to donors of deductibility of contributions, exemption from certain state taxes, exemption from certain federal excise taxes, nonprofit mailing privileges and ability to apply for grants, etc.
NON-CHURCH (religious/charitable/educational) organizations are REQUIRED to file for 501(c)3 status in order to be tax-exempt. They must either file the Form 1023 with the IRS or come under group status such as what PCAI offers.
3. Do I have to file anything with the IRS?
Yes. All non-church religious/charitable organizations are required to file a Form 990 regardless of annual gross income. Different 990 Forms apply according to your income. We will inform you or you may consult a CPA as to what Form 990 you are required to file.
NOTE: PCAI does not file a group return, therefore, each subordinate is required to file their own 990 form.
4. Is there a cost for a charter?
Yes. There is a one-time set-up charge of $400, and thereafter a required monthly charter fee that starts at $35/mo. The charter is automatically renewed on March 28th of each year as long as the organization remains in good standing.
There is an additional cost if we help prepare bylaws ($50) or prepare state nonprofit incorporation ($250) in compliance with IRS codes.
There is no charge for obtaining an EIN from the IRS or to check on any other state filings that are required.
5. Why is there a monthly fee when covered under PCAI’s group exemption?
We have qualified, full-time staff who serve you and your ministry comparable to that of a large church staff. There are many things we do on a daily basis to stay in compliance with the IRS in order for the subordinate to keep and maintain their status. Most important of all, we are here to pray and give support to you to carry on the work God has called you to do. As you know, operating a ministry or church requires understanding finances. We feel we are reasonable in what is required and strive to be good stewards of what God has entrusted to us. Our monthly requirements are on a sliding scale for our subordinates to be fair to all, no matter the size of the ministry. Be careful of organizations that extend their group exemption without similar requirements.
6. How do we obtain a charter?
We’ve made it easy. Just fill out the 501(c)3 Request Form below. We will send you a packet with all the information necessary to get started. When you complete the forms in the packet, mail them back to us as soon as possible. When your completed forms arrive, we will begin working on them (usually the same day). After your paperwork has been processed, it is evaluated by our Charter Board. Once approved, your ministry charter is sent to you immediately. The IRS is informed upon your approval as a subordinate under our group exemption.
7. How long does it take to get a charter?
Assuming your paperwork is complete and in order, it takes approximately thirty days from the date your charter application is received.
NOTE: No charter application can be processed until your PCAI Membership Application has first been approved.
8. Am I required to file reports with PCAI?
Yes. There is a financial summary report and a report of activities including any changes in your purpose or board of directors. This report is due by March 28th of each year and ensures you are in compliance with IRS 501(c)3 rulings. PCAI does not, however, manage your funds or tell you how to operate your organization. Each organization is autonomous and sovereign. PCAI does not claim right to ownership of the property of the organization.
9. Must I become a member of PCAI to receive a charter?
Yes. If you are the president of the religious organization, you are required to hold membership credentials with PCAI or AEGA (whichever one is most applicable). While primarily for accountability, general oversight and liability purposes, this policy provides benefits for members as well. We do not require you give up any membership you may hold with another organization.
10. Is your office available if I have IRS or accounting questions?
Yes. We are always available to assist you. More importantly, we continually lift you and your religious organization up in prayer. Another great benefit of being part of an International Fellowship: you are never alone!
Types of Charters
Charitable Faith-based & Religious Organizations
This includes any type of religious organization such as, but not limited to: women’s shelters; men, women or youth outreach ministries; adoption agencies; feeding the poor; and relief- or disaster-type ministries.
Local Mission
The local mission is similar to the local church but differs in purpose. Like a church, a local mission must have regular services in a home or building, but its purpose is to minister primarily to the poor, orphans, the unhoused, abused women and children, outcasts, etc. A mission may offer rooms for rent, distribute food and clothing and offer educational or Bible studies. Because a local mission is a nonprofit tax-exempt organization, it may charge a reasonable fee for its services; however, it cannot require payment from a person unable to pay. Doing so places the mission in danger of losing its exemption should such an act be reported to the IRS.
Evangelistic
This charter is granted to religious organizations such as evangelists, preachers, Bible teachers and music ministries. Holding an evangelistic charter allows your religious organization to receive donations while traveling anywhere in the United States. If tapes, books or other items are to be sold or given away, this information must be stated in the charter application.
Educational
This includes church schools, academies, Bible colleges and seminaries. This charter is unique and is not offered by most associations to its members. Many churches, individual ministers, Bible teachers, and others have long awaited an opportunity to begin a faith-based school. This educational charter now makes it possible. The institution must not be racially discriminatory and must clearly outline its purpose and curriculum.
NOTE: This department of PCAI does not render any legal or tax advice. Nor does the Division of Corporations of your state claim to render any legal, tax or accounting advice. As in all such matters, you should acquire appropriate counsel from those who are in that specific field. As the charter department of PCAI, we are authorized by the IRS to examine your organizational documents and operations to make a determination as to whether or not your organization qualifies as a nonprofit organization under specific sections of the IRS code. Prices required to charter a church or ministry is subject to change without notice.