A nonprofit's status with the IRS has become increasingly important. Thousands of new nonprofits receive tax exemption each year, and, regretfully, bogus nonprofits are also plentiful. Donors, clients, and people who do business with nonprofits need to protect themselves by ensuring that the organizations they support and interact with are legitimate.
Donors have clearly gotten the message: in a recent GuideStar-Hope Consulting survey, fully 87 percent of 5,000-plus donors said that supporting legitimate organizations was extremely important to them.
To meet your needs better, we have added IRS status information to our database. Following are the different status messages you will find on GuideStar and a brief explanation of what each means.
Institutional funders should note that an organization’s inclusion on GuideStar.org does not satisfy IRS Rev. Proc. 2011-33 for identifying supporting organizations.
Although an organization with this message is in good standing with the IRS, it may not be eligible to accept tax-deductible contributions or charitable distributions (i.e., grants). Here's why more research may be necessary:
If you are an individual donor. Not all tax-exempt organizations are allowed to accept tax-deductible donations. Credit unions, chambers of commerce, and fraternal organizations are just a few of the nonprofits ineligible to accept such contributions. Because our database includes all tax-exempt organizations registered with the IRS, you can't automatically assume that a nonprofit you find on GuideStar can accept a tax-deductible gift.
If, however, the nonprofit has the "Institutional funders" message above and a "Donate Now" button on GuideStar, it's eligible to accept tax-deductible contributions.
If you are with a private foundation or organization that sponsors donor-advised funds. Finding a nonprofit on GuideStar, even one with a "Donate Now" button, does not meet IRS requirements for qualifying an organization to receive a charitable distribution. (The requirements are spelled out in IRS Revenue Procedure 2011-33.) Doing so puts your organization at risk of having to pay excise taxes.
Message: GuideStar has no record of this organization's having been on the IRS's list of tax-exempt organizations, but the organization has provided GuideStar with documentation indicating that it is recognized as tax-exempt by the IRS.
Thousands of nonprofits not included on the IRS list have asked to be added to GuideStar. If they provided appropriate documentation demonstrating that the IRS recognized them as tax exempt, we added them.
There are several reasons why a legitimate tax-exempt organization might not appear on the IRS list. They include:
The nonprofit is a religious organization.
Religious organizations are automatically tax exempt, not required to apply to the IRS for exempt status, not required to file an annual return with the IRS, and therefore often not included in IRS records.
To be added to our database, a religious organization must provide the following:
Fax or mail this information using the information on the right.
The nonprofit is a subordinate organization that receives tax-exempt status through a parent organization.
If the organization is registered as a separate entity with the IRS and has an EIN (employer identification number) that differs from the parent organization's, a representative may update the organization's nonprofit report.
If the organization does not have a separate EIN, it must ask the parent organization to include a description of it in the parent's report; the parent organization can do so through the GuideStar Exchange.
The nonprofit has recently received exempt status from the IRS, but IRS records have not yet been updated to reflect that status.
Any nonprofit that has received a 501(c) determination from the IRS can be added to our database by forwarding a copy of its IRS letter of determination; this is the letter that the IRS sent in response to the organization's application for tax exemption (applications for exemption are usually filed using an IRS Form 1023 or Form 1024. Fax or mail the letter using the information on the right.
You will need to contact the IRS. Only the IRS can change your organization's status, and we can't change your status on GuideStar until the IRS has revised it. To contact the IRS:
Mail your inquiry to:
Internal Revenue ServiceExempt Organizations DeterminationsP.O. Box 2508Cincinnati, OH 45201
Message: This organization's exempt status was automatically revoked by the IRS for failure to file a Form 990, 990-EZ, 990-N, or 990-PF for 3 consecutive years. Further investigation and due diligence are warranted.
The Pension Protection Act of 2006 requires the IRS to revoke the exemption of any tax-exempt organization that fails to file an annual return (IRS Form 990, 990-N, 990-EZ, or 990-PF) for three consecutive years. The IRS publishes this information on its Web site, updating the list monthly. Learn more about automatic revocations
Message: This organization does not appear in the IRS's most recent list of tax-exempt organizations. IRS records do not, however, indicate that the organization's tax-exempt status has been revoked. Contact the organization for more information.
The message pretty much sums it up: We can't affirm that the nonprofit is in good standing, but we also can't confirm that it is not in good standing. You'll need to contact the nonprofit to get a more definitive answer.
GuideStar USA, Inc.4801 Courthouse Street, Suite 220Williamsburg, VA 23188
Be sure to include your EIN, contact name, and phone number or e-mail address with your documentation.
GuideStar is a 501(c)(3) nonprofit organization. Copyright © 2013, GuideStar USA, Inc. All rights reserved.