Starting a church can be a huge task, one that’s almost impossible to take on all by yourself. In this article, we’ll talk about why you may want to start a church, share how the Internal Revenue Service (IRS) defines a church, discuss “church planting,” and give you a step-by-step guide to legally start your new church.
So you’ve been called to start a church. You feel compelled to reach out to the community in a new way, with your own goals, hopes, and messaging. You’re ready to start the work…but you have no clue how to get started.
You aren’t the first! Starting a church can be a huge task, one that’s almost impossible to take on all by yourself. Churches require a team to get off the ground, so be sure you have a group you trust to dive into this process with.
No matter what, you’re not in this alone. There is a network of other churches, nonprofit professionals, and resources out there to help you along the way. Also, in this article, we’ll walk you through the steps it takes to legally start your new church.
When you’re ready to start fundraising, all of us at Donorbox will be here for you, too. We try to make your work starting a new church as easy as possible by offering comprehensive, easy-to-use fundraising tools to help you make the most of your fundraising efforts. Read on to learn more about how to legally start your church.
You have the idea to start a church and spread the gospel, but you aren’t quite sure if that’s enough justification to start a church in a specific area. It can be daunting to make the decision to start a new church, but with the right mindset, you can determine if it’s really the right move for you and for the community you’re working with. Here are four questions to ask yourself:
Once you have answers to these questions, you’ll have a better sense of how right it is for you to start your own church. But what does it mean, legally, to be a church? Read on to learn how the IRS defines the term.
It may seem difficult to define a church. What does it mean to be a church? And, what about a ministry?
These two terms, “church” and “ministry,” are often used interchangeably, but they are different entities in the eyes of the IRS. Both churches and ministries are eligible for tax-exempt, nonprofit status under section 501(c)(3). However, ministries have to apply for such status within 27 months of formation. Churches don’t have to apply since they are automatically given nonprofit status.
There are also differences in the annual filings required for ministries and churches. Ministries with 501(c)(3) status must file form 990 annually; churches don’t have to file this form unless they officially apply for 501(c)(3) status (more on that later!).
So what’s the difference? The IRS has a list of fourteen characteristics they attribute to churches. They are as follows:
To qualify as a church, you don’t need to have all of these qualities, but you should have some. Usually, the IRS uses a combination of some of these characteristics coupled with other circumstances to establish whether you qualify as a church for federal tax purposes.
Keep these characteristics in mind as you work to start your own church.
Much like a farmer spreading seeds to grow multiple plants, church planting involves setting up multiple churches to spread God’s word. Often, these new churches are established and the “planter” moves on to start more.
Church planting usually includes the following activities:
How does this differ from starting a church? The answer is it doesn’t, really, at least not in modern practice. The term “planting” has more of a religious connotation as it refers primarily to the act of spreading the gospel. What does that look like in our modern times? Starting a church!
Starting a church often requires the same activities as planting a church, and the terms are often used interchangeably. Read on for a step-by-step guide that includes the legal requirements for starting a church.
Once you’ve decided that your calling to start a church of your own is the right step, it’s time to get started! It can feel like a daunting task to tackle, but by following these steps you can approach it with grace and efficiency.
Note: Remember that the process for starting a church varies state-to-state and with other factors. These are all important steps no matter where you are, but depending on what you need for each step, you might need to work out of order.
No worries, if you do! Consider this a checklist and come back to it when you need to figure out the next step toward starting a church.
Here’s How to Start a Church in seven steps.
The absolute first step? Figure out who you are, how you’ll be known, and what you want your church to be like.
These are the kinds of basic details you’ll need to have in hand as you continue down this list of steps. So what do you need to decide on up front? Here’s a checklist to get you started:
Establishing these elements will also help you shape what you want your church to be like. It will help guide you as you take on the next steps to setting up a church. It will also help you begin thinking about fundraising for your church—establishing who you are and how you’ll present yourself will help your supporters know that supporting you is the right choice.
Think of your bylaws as the guide to how your church will be organized. You’ll want to carefully lay out every basic aspect of your church. If you’re hoping to apply for official 501(c)(3) tax-exempt status, you will need to submit your bylaws to show that you are governing your church in a way that complies with the 501(c)(3) requirements.
Luckily, you don’t have to start from scratch! There are great templates and samples of bylaws online—just find one that fits the scope of your church.
An EIN is used by the IRS for tax purposes and will be vital for a variety of establishing steps and documents, including getting a bank account.
Applying for an EIN is simple. All you have to do is fill out Form SS-4 by following the instructions. Form SS-4 asks for basic information about your church including the name, address, and type of entity. For the type of entity, be sure to select “church or church-controlled organization.”
You can submit your application online, by mail, or by fax.
Note: You may think you don’t need an EIN until you have paid staff. Not true! An EIN serves somewhat the same role as a social security number does for an individual—as an identifier.
Starting a church requires some funds to get started. With fees, salaries (if you have any), and other miscellaneous expenses, you’ll want to have a bank account that works for your needs—and so you can be ready to fundraise!
Before you start collecting funds, you’ll need a place to store them! To find the best bank for your church, consider what’s most important to you. Ask yourself these questions:
You might consider meeting with officials from multiple banks to get a sense of which one would work best for your church.
Pro tip: Usually you’ll need to provide an EIN for a bank account but be sure to ask each bank for their requirements for opening an account. Depending on their answer, you might need to skip this step and return at a later point in the process—an example would be if you need to provide proof of 501(c)(3) status.
Fundraising for your church isn’t as easy as it once was. No more just relying on passing the weekly offering plate. Churches need to get more agile about encouraging donations and offering exciting new ways for their supporters to give.
That’s why when you begin fundraising for your church, you want to be sure to offer your supporters as many ways to give as possible. This means online giving, in-person giving, and more!
To streamline the donation process for your donors and yourself, you’ll want to choose a fundraising platform that lets you:
Maybe the most important feature to look for in a fundraising platform? One that is trusted by other churches.
Donorbox offers all of the features outlined above with our dedicated church fundraising pillar, Donorbox MinistryMatters. Donorbox gives you the flexibility you need to begin fundraising successfully for your new church, and is trusted by thousands of churches including Brown Line Church, the Calvary Family of Churches, Unity of Boulder, and more around the world. Here’s a short one-minute video to show you how we make this possible –
https://www.youtube.com/watch?v=u6QCEwSKotk
Certificates of formation, often also referred to as articles of incorporation, are necessary for your church to be established in the eyes of the government. The process for obtaining this document varies from state to state, so you’ll want to do some research to find the most efficient way to file in your state. Be sure to file as a nonprofit.
Often when trying to incorporate your church, you’ll need to establish the following:
1. A registered agent. This is a person or entity with a physical address that will receive official mail on your church’s behalf.
2. Someone to file the paperwork. You’ll need to have one designated person, called the “incorporator,” to be the one to prepare and file the articles of incorporation paperwork.
Pro tip: Consider hiring an attorney to handle this part for you. That way, you can be sure the job is done correctly and all necessary information is filed with the state.
3. Consent from the church. This usually means allowing your church elders (or however you set up your leadership structure) to vote on whether to incorporate or not.
Although churches traditionally didn’t operate as incorporated organizations, many choose to due to the legal protections incorporation provides.
This step is technically optional. If your church meets the requirements of section 501(c)(3), you’re automatically granted tax-exempt status without having to apply for it – a great perk for churches that are often busy enough with their day-to-day actions.
But there are some compelling reasons why more and more churches are choosing to officially apply for 501(c)(3) status.
There are other benefits, but these are the significant benefits churches consider when deciding if applying for official 501(c)(3) status is right for them.
If applying for official status is right for you, read on to learn more about the application process.
Although it might seem like a daunting process, there are a ton of online resources to help you along as you apply for 501(c)(3) tax-exempt status, including this 501(c)(3) Tax Guide for Churches and Religious Organizations.
Once you have your official status in hand, you can accept tax-deductible contributions worry-free.
You’ve done the work to make your church official in the eyes of the government. Now it’s time to start the important work you originally set out to do— to help the community around you by uniting them with God’s word.
Remember as your church continues to grow to stay humble and remember what it was like when you were all the way back on step one, figuring out the basics of who you are and your goals. Continue to grow with a full heart and kindness in every action!
For more tips and resources on fundraising and nonprofit management, you should check out the rest of our Nonprofit Blog. Subscribe to our newsletter for fresh content delivered to your inbox every month!
Here are some FAQs to refer to as you get going.
No, churches don’t have to report offerings to the IRS, but they do have to keep track of them and provide the appropriate donation receipt so donors can deduct these contributions on their annual taxes. To learn more about donation receipts, check out our complete guide to donation receipts for nonprofits.
Technically no. Churches that meet the requirements of section 501(c)(3) are automatically granted tax-exempt status, without applying. However, many churches do officially apply for a variety of reasons and benefits, including ease of mind for donors who wish to claim tax exemption for contributions and church elders & leaders who might be concerned about compliance.
These vary state-to-state but usually include filing incorporation in your state. In the eyes of the IRS, you must adhere to at least some of the fourteen qualities they use to define a church. In order to be exempt from taxes and eligible for donors to deduct donations to your church on their taxes, you must adhere to the requirements for nonprofits outlined in IRS section 501(c)(3). You may also choose to apply for official 501(c)(3) nonprofit status.
The main practical difference is that a church has a location with a regular congregation and regular meetings. For example, a bible teacher who doesn’t have ties to one church has a ministry. However, the IRS has different definitions of churches and ministries (see the list of fourteen qualities linked above), where churches receive slightly more benefits in that they don’t have to apply for official tax-exempt status under section 501(c)(3), while ministries do.
Lindsey spent years wearing many hats in the nonprofit world. Whether she was helping arts nonprofits with their messaging and content, planning a fundraising gala, writing an NEA grant proposal, or running a membership program with over 400 members, she learned how to navigate – and appreciate! – the fast-paced world of fundraising. Now, she loves sharing those hard-earned lessons with the Donorbox community.
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Lindsey Baker Bower