Can we start a non-profit with out 501c3 status?

Question

We want to start a non-profit, does 501c3 is a must?

Or without the 501c3 we still can raise funds and spend it?

Answer 1

A 501c3 is not required for a non-profit but it would be a must for the type of non-profit that it relates to. Non-profits can be Unions, Churches, Club Memberships etc. However, if the non-profit is a Charity and you attempt to raise money with out 501c3 status, you could be liable as a Professional Fund Raiser Company and subject to State Laws that would require a license and bonds to collect for a 501c3 status non-profit. Without any of these things there is no way to prove your cause and subjects you to imprisonment for simply going about taking funds from people for a cause you can't prove exist. Just the same most people will not donate to a NOT 501c3 status Charity in fear of a sham and large donators will not give without being apply to file it on a tax return. So, you would amount to a Robin Hood panhandler.

Answer 2

Short answer: yes.  501(c)3 is the most common non-profit entity, but there are many others.

But you do need to establish some sort of tax-exempt status.  And what you do may make a difference on whether donations to your non-profit are tax deductible or not.  That can be a HUGE issue in fund raising.

I'd suggest consulting an accountant familiar with non-profits or contacting your local chapter of the Small Business Administration.  Go over the specifics of your situation with them.