Church or Nonprofit? Know the Difference Before You Start the Church Plant
So you’re ready to build something that makes an impact. A church. A ministry. A community outreach. A movement.
You’re called. You're passionate. You've got the name, the logo, and maybe even the EIN.
But here’s the part no one told you:
You might be calling it a “church” and setting it up like a “nonprofit,” but if you don’t understand the difference—or file the right paperwork—you could be blocking your own blessings.
This isn't just a technicality. It’s the difference between operating legally and hitting unnecessary walls with the IRS, banks, donors, and your own future plans.
Let’s break it down.
1. If You’re a Church—Say So. On Paper.
If you are planting a church, the best thing you can do from day one is call it what it is.
The IRS automatically recognizes “churches” as tax-exempt organizations.
That means:
No need to file Form 1023
No waiting for approval
No guessing game on your status
But if you use a name like “Hope Ministries” or “Kingdom Impact Network,” it’s not automatically clear to the IRS (or your state) that you’re a church.
Here’s the fix:
Include the word “church” in your organization’s legal name and in your formation documents. It’s a small detail that protects you from major complications.
2. Nonprofit ≠ 501(c)(3)
This is one of the biggest misunderstandings I see, especially with new founders.
“We’re a nonprofit, so we’re good to go, right?”
Not necessarily.
Here’s the truth:
A nonprofit is a designation at the state level
A 501(c)(3) is federal recognition by the IRS
So yes, you can be a registered nonprofit corporation in your state—but that doesn’t mean you’re tax-exempt on a federal level. It also doesn’t mean your donors can write off their contributions or that you’re eligible for grants.
To get that status, you need to file Form 1023 (or the simplified 1023-EZ) with the IRS and receive a determination letter. Without that? You’re just assuming, not confirming.
3. Should Churches Apply for 501(c)(3) Anyway?
You don’t have to—but you might want to.
Even though churches are automatically tax-exempt, there are real benefits to filing for formal 501(c)(3) status:
Pros:
IRS recognition: Gives you a letter to show banks, grantmakers, and government entities
Credibility: Boosts donor confidence
Property tax exemption: Often helpful if you plan to own land or a building
Easier compliance: Some state or local systems still want paperwork proof
Cons:
Requires an application
May come with annual IRS filings and accountability
Increases oversight, which means you need strong admin systems in place
Bottom line:
If you’re small, local, and staying simple, you may not need it.
If you’re growing, expanding, or fundraising, get the letter.
4. No Form = No Federal Status
Let me be clear:
If you never filed Form 1023 (or 1023-EZ), the IRS does not consider you a 501(c)(3)—regardless of how much good you’re doing.
That includes:
Churches that never added “church” to their name or documents
Nonprofits that assumed their state registration was enough
Ministries that never followed up after getting an EIN
If you skipped the form, the IRS skipped you too. It’s that simple.
5. Ministry or Business? The IRS Cares.
This is where a lot of well-meaning founders get stuck.
You're selling books. Hosting events. Getting speaking engagements. That’s incredible!
But let’s ask the real question: Is your structure aligned with your income model?
If you’re charging for services, products, or content, it might be a business, not a nonprofit.
If you’re providing services to the public without seeking profit, it might be a nonprofit.
Key takeaway: “Ministries” is a vibe. Your actual legal structure is what matters.
You can be spirit-led and strategically structured. One does not cancel out the other.
6. “Ministries” Doesn’t Equal “Church”
Just because your organization has “Ministries” in the name does not mean the IRS considers it a church.
The IRS has a 14-point guideline for what qualifies as a church. Things like:
A distinct religious community
Regular services
Established doctrine
Ordained leadership
Religious education, sacraments, and membership structure
If you’re missing key elements—or if your org functions more like a nonprofit outreach than a church—then the automatic exemption might not apply to you.
Final Thoughts: Build What God Showed You—But Build It Right.
Listen, I get it. You’re not here to chase paperwork. You’re here to change lives.
But let’s not act like one doesn’t affect the other.
You can pray, fast, and cast vision all day—but if the IRS sends a letter you can’t answer…the dream stalls.
That’s where I come in.
I help founders and faith-based leaders like you get clarity, get compliant, and build with confidence.
Ready to stop guessing and start structuring?
DM me “Structure” or book a clarity call today.
You’re not just launching a ministry.
You’re stewarding a mission. Let’s treat it that way.
#BriAdvised
Smart. Structured. Covered.
