Tag Archives: nonprofit history

Are churches nonprofits?

Yes, they’re tax-exempt under IRC Section 501c3. But how, exactly, are houses of worship such as temples, mosques, and churches nonprofits?

If you’ve recently discovered religious tax exemption and think it has something to do with the clout of modern mega-churches, you might be surprised that this is nothing new under the sun. In the U.S. churches have been officially tax exempt since 1894 and unofficially tax exempt since Day 1. Before the IRS even existed, their work fit the modern definition of the nonprofit sector – organizations that use private funds for the public good.

The legal underpinnings that make churches nonprofits are quite a bit murkier than the de facto ones that derive from long-standing practice. The Emperor Constantine explicitly granted the first known tax exemption to churches in the third century, but the highest law of our own land, the U.S. Constitution, is silent on the matter. Nevertheless, when the Supreme Court reexamined the nonprofit status of churches in Walz v. Tax Commission of the City of New York (1970), the rationale was attributed to the First Amendment. Tax exemption, according to that decision, “creates only a minimal and remote involvement between Church and State and far less than taxation of churches [would].”


churches tax exempt

Constantine: “…and then I made myself spiritual leader of the church and declared it tax-exempt!”


The Walz decision is what’s always quoted today on this issue, though it was merely an attempt to explain why something is the way it’s always been. The Internal Revenue Code has since its beginnings in the late nineteenth century categorically defined religion (as well as science) as a 501c3 exempt purpose. Furthermore, it considers “charitable” actions to include “the advancement of religion.” So an honest answer to the question of what makes churches nonprofits is that they just are.

Churches are automatically considered nonprofits without having to apply for exempt status. Some choose to formally request a 501c3 letter to encourage contributions, which people seem more willing to give when they’re assured to be tax-deductible (who would’ve thought?).

While the Church of Satan famously spurned its nonprofit status, that status can generally only be pried from the cold, dead hand of religious organizations. The Church of Scientology lost theirs for 26 years only after being recategorized as a commercial rather than a spiritual business. For houses of worship that do not charge thousands of dollars for auditing sessions, the greatest risk is violating the 1954 Johnson Amendment to the tax code that prohibits exempt entities from endorsing or opposing political candidates. You may have noticed that in practice ministers endorse, oppose, and generally comment on politics all the time. The Johnson Amendment is so wishy-washy that although hundreds of churches are reported as violators the IRS has only ever stripped nonprofit status from one politically active entity – a small church in Upstate New York that ran anti-Bill Clinton ads in the newspapers back in 1992.


The Church at Pierce Creek's ad that finally got the IRS's goat.

The Church at Pierce Creek’s ad that finally got the IRS’s proverbial goat.


The term “churches” here, incidentally, is understood generically to include all sorts of houses of worship, regardless of religion. While there have been dozens of petitions to reclassify the Westboro Baptist Church as a hate group that doesn’t deserve tax exemption, there have been many more started by narrow-minded people floored by the idea that Islamic mosques, Buddhist temples, and other non-Christian houses of worship are equally considered nonprofits. To reiterate: Yes, they are. They just are.

Whether or not churches should be nonprofits is another story. From our perspective as nonprofit fundraisers, the most sophisticated argument against is that religious instruction is not work that the government otherwise would, or even could, do. Nonprofits are meant to solve public sector problems with private sector resources. Even if religiosity is a public good, it certainly falls outside the scope of the public sector. A much less convincing reason is the oft-repeated charge that churches aren’t even really helping people. Honestly, it’s nearly impossible to measure degree of helping people objectively across nonprofits and even if such a metric existed, we suspect no church would rank among the worst offenders.

In any case, wasting time petitioning to remove a 501c3 organization, or even a whole class of them, is silly. All of us are already empowered to make them flourish or fold. All of us should know that exempt organizations, religious and non-religious alike, only exist as long as we keep giving them money.

Want to know more about what makes churches nonprofits? You can find the IRS Tax Guide for Churches and Religious Organizations here!

The creepy history of museums

The Kansas City Museum is one of many in the country embracing Halloween this year, but who knew that the origin of these nonprofits is actually quite macabre?


kansas city museum

Maybe only people who realize that the history of pretty much anything is quite macabre.


In Kansas City costumed candy-lovers of all ages can trick or treat to their hearts’ content down a section of Gladstone Avenue near the Kansas City Museum. Most of the houses in the vicinity went all out with spooky decorations. Right across the street from the museum, a full cast of Dorothy, scarecrow, lion, and ax-wielding tin man mingle among the many kids waiting in line in front of the mansion. 6,000 of them are expected to attend the event tonight.

Crowds are nothing new for museums. They are easily the nonprofits with the most impressive impact numbers, collectively hosting about 850 million unique visits a year in this country alone. One of the many reason’s they’re attractive to philanthropists is their reputation for packaging dry adult subjects like Renaissance art or biodiversity into fun, bite-size educational morsels that young visitors are happy to devour. Yet early museums weren’t accessible to large numbers of guests, nor did they deign to cater to children. In fact, the main thing ancient and early modern museums had in common with the Kansas City Museum on Halloween night is that they were designed to scare, disgust, and make uncomfortable the people passing through.

The first museum was probably the one established by Princess Ennigaldi of the Neo-Babylonian Empire around 530 BCE, but it took until the Middle Ages for them to really catch on in the Middle East and in Europe. They were collections of various “curiosities” maintained and curated by wealthy individuals for the benefit of their wealthy friends. Aptly called “cabinets of curiosities,” a particularly creepy collection might become renowned far and wide, a “must-see” for visiting nobility and their dignitaries.


museum of ole worm

Anybody who was anybody in the 17th century would’ve hoped for an invitation to this Danish cabinet of curiosity, ran by a physician whose real name was Ole Worm.


The “cabinets” – a humble term that actually used to denote a large room – usually contained ancient vases, swords, scrolls, and other antiquities. There were also the requisite rare gems and shells. The main attractions, though, were the items that made guests question their place and purpose in God’s creation. Relics of saints were always a good bet, especially severed body parts or bloody garb that the poor soul was martyred in. Some curiosity cabinets featured exotic animals stuffed or floating in jars of alcohol. Wooly mammoth tusks were show-stoppers, but the real elite could boast phoenix feathers, unicorn horns, and the femurs of giants. In the early seventeenth century a spectacular English museum maintained by John Tradescant the Younger treated enthralled visitors to a stuffed dodo, a mermaid’s hand, a dragon’s egg, the ceremonial cloak of Wahunsunacawh (known to the English as Chief Powhatan), a piece of the True Cross, and a vial of the blood that had rained down on the Isle of Wight.

The medical curiosities of the day encompassed so-called “monstrous births” as well as the results of terrible accidents. The vast majority of museums used drawings, casts, or sculptures but some had the real deal. Their visitors were treated to the corpses of conjoined twins and victims of elephantiasis; disturbingly large tumors; and famous murderers’ skulls for days, complete with the phrenelogist’s assessment of each.


leipzig monstrous birth

This “monstrous birth” occurred in 18th century Leipzig and was so well-preserved that it can still be viewed in a German museum today.


For all their macabre subject matter, early museums were still considered the pinnacle of polite society. They were valuable because they could fill people with awe that transcended and disrupted the everyday. By making viewers uncomfortable the curators sought to spark reflection and new understanding, making translucent the barrier between the wealthy visitors and the ancient, the exotic, the dangerous, the murdered, and the malformed for just a few hours.