As a donor, your desire to ensure that your contributions are going to legitimate and tax-exempt charities is commendable. Understanding how to verify a charity's IRS 501(c)(3) status is essential for protecting both your philanthropic interests and your tax benefits.
This guide will walk you through the process of verifying a charity's tax-exempt status, including how to use the IRS Tax-Exempt Organization Search tool, and will provide essential tips on what to look for in your verification process.
Step-by-step walkthrough
Access IRS TEOS
Visit the IRS Tax-Exempt Organization Search (TEOS) at https://apps.irs.gov/app/eos. This tool allows you to verify whether a charity has current tax-exempt status.
Enter Charity Information
Input the charity's Employer Identification Number (EIN) or organization name in the search bar. This will allow you to find specific information about the charity you're interested in.
Check for Exempt Status
Once you view the results, check if the charity's status shows 'Currently Exempt' and that it falls under subsection 501(c)(3). This confirms the organization is recognized as a public charity by the IRS.
Review Revocation Status
Ensure that there is no revocation date listed for the charity. If there is a revocation, it indicates the organization has lost its tax-exempt status, which could affect your donation's deductibility.
Verify State Registration
Check your state's Attorney General website to confirm that the charity is registered to solicit donations. Each state maintains its own registry, and this adds another layer of verification.
Document Your Findings
Save a printout or screenshot of the verification results and any state registration documentation. This information will be valuable for your records when making a donation.
Positive signals (green flags)
✓ Consistent Filing
A charity that consistently files its Form 990 demonstrates transparency and accountability, essential traits for any legitimate nonprofit organization.
✓ Positive State Registration
If the charity is registered with the state Attorney General and maintains good standing, it signifies compliance with state regulations and good practices.
✓ Positive Reviews
Favorable reviews on platforms like Charity Navigator or the Better Business Bureau indicate that the charity is well-regarded by the community and donors.
✓ Clear Mission and Impact Reporting
Charities that clearly articulate their mission and provide impact reports showcase their commitment to transparency and effective use of donations.
Warning signals (red flags)
⚠ Revocation Date Present
If the IRS TEOS shows a revocation date for the charity, it indicates that the organization may no longer be compliant with IRS regulations. Do not donate until this status is clarified.
⚠ No State Registration
If the charity is not registered with the state Attorney General, it may not be authorized to solicit donations in that state, raising concerns about its legitimacy.
⚠ Inactive Status
An inactive status on the IRS TEOS can be a warning sign. It suggests that the charity has not been active in fulfilling its organizational purposes, which may impact its credibility.
⚠ No Form 990 Filings
If the charity has not filed Form 990 for three consecutive years, it risks automatic revocation of its tax-exempt status. Check for this information through reliable nonprofit databases.
Tools + resources
- https://apps.irs.gov/app/eos
- https://www.charitynavigator.org/
- https://projects.propublica.org/nonprofits
- https://www.bbb.org/charity-reviews
- https://www.irs.gov/charities-non-profits/form-990-series-guides
Providence state-level oversight
In Providence, Rhode Island, potential donors should also be aware of the state's unique landscape for charitable organizations. The Rhode Island Secretary of State’s office maintains a charity registration database, which can be accessed to verify local nonprofits. Additionally, the Rhode Island Better Business Bureau offers resources and reviews for local charities, enhancing donor education and transparency.