As a donor, it's commendable that you want to ensure your contributions go to legitimate charities. Verifying a charity's IRS 501(c)(3) status is vital not only for making informed decisions but also for ensuring your donations are eligible for tax deductions. This guide will walk you through the necessary steps to verify a charity's status and provide other helpful tips.
Understanding how to access the IRS Tax-Exempt Organization Search (TEOS) and confirming state charitable registrations can help protect you from potential fraud. Below, you'll find a step-by-step guide to verifying a charity's 501(c)(3) status, along with crucial red flags and green flags to keep in mind while researching organizations.
Step-by-step walkthrough
Access IRS TEOS
Go to the IRS Tax-Exempt Organization Search website at apps.irs.gov/app/eos. This is the official tool for verifying a charity's tax-exempt status and will help you determine if it qualifies as a 501(c)(3).
Enter EIN or Name
Input the charity's Employer Identification Number (EIN) or organization name in the search bar. This will provide you with direct information regarding its tax status and ensure you're looking up the correct entity.
Check Status
Look for a status that reads 'Currently Exempt' and a subsection indicating '501(c)(3)'. This confirms the charity is recognized by the IRS as a public charity, which is essential for tax-deductible donations.
Verify State Registration
Different states have their own charitable registration requirements. Check your state's Attorney General's website for the charity’s registration status to make sure it is compliant with local laws.
Documentation
Before finalizing your donation, save a printout or screenshot of the IRS TEOS results along with any state registration confirmations. Keeping these documents helps protect your tax claims during audits.
Positive signals (green flags)
✓ Active 501(c)(3) Status
A current '501(c)(3)' status in TEOS indicates that the charity is compliant with IRS regulations, reassuring you of their legitimacy and tax-deductibility of your donations.
✓ Positive Ratings
High ratings on review platforms like Charity Navigator or the BBB provide confidence that the charity is effectively using donations for their mission.
✓ Transparency in Reporting
A charity that regularly files its Form 990 and shares its financials is demonstrating transparency, a strong positive indicator of its operational integrity.
✓ Registered With State AG
If the charity is listed on your state's Attorney General's charity registry, it shows compliance with local laws and adds another layer of accountability.
Warning signals (red flags)
⚠ Status Shows 'Revoked'
If the IRS TEOS indicates that the charity's status is revoked, it means they are no longer eligible for tax-deductible contributions, which should raise immediate concerns about your donation.
⚠ No State Registration
A lack of registration with the state Attorney General can indicate a potential scam or unprofessional operation, raising doubts about the legitimacy of the charity.
⚠ Invalid EIN
If the EIN you enter into TEOS does not return any result, this may suggest that the charity is not officially recognized by the IRS, leading to potential issues with your donations.
⚠ Negative Reviews
Research reviews on platforms like Charity Navigator or the Better Business Bureau. A significant number of complaints can signal potential issues with the charity's practices.
Tools + resources
- IRS TEOS: https://apps.irs.gov/app/eos
- Charity Navigator: https://www.charitynavigator.org
- ProPublica Nonprofit Explorer: https://projects.propublica.org/nonprofits
- Better Business Bureau Charity Reviews: https://bbb.org/charity-reviews
- State AG Registration: [Insert your state's AG website link here]
- Association of Fundraising Professionals: https://afpglobal.org
New York state-level oversight
In New York, it's essential to confirm a charity's registration through the New York State Attorney General’s Charities Bureau, which offers a comprehensive search tool for charitable organizations. Additionally, the Better Business Bureau of New York provides charity reviews, ensuring donors can access crucial information about local nonprofits. For more guidance, consider the New York Council of Nonprofits, dedicated to supporting nonprofit organizations with resources and advocacy.