Differences Between Churches and Nonprofit Organizations
- A church is automatically tax-exempt but still must adhere to general nonprofit requirements. For example, donations are tax-deductible.
- Legally, churches can structure as nonprofits to limit liability.
Legal Structures and Tax-exemption of Churches
- Common nonprofit corporation structures for churches are C Corporations and 501(c)(3) nonprofits.
- The government does not interfere in religious affairs or financially support churches.
Benefits of Incorporating for Churches
- Even small, unincorporated churches can face legal risks and be sued. To limit liability, many incorporate.
Is there a difference between not for profit and nonprofit?
- A church is a religious nonprofit. Churches differ legally from other nonprofits. They automatically have tax-exempt status. They don’t need to apply.
The government doesn’t interfere in church affairs or sponsor them. This reinforces rights to practice faith freely.