501c3 Q & A   Part 1


Part 2 Menu of Qs Citations

Since therefore, brethren, we have confidence to enter the holy place by the blood of Jesus, by a new and living way which he inaugurated for us through the veil, that is, the flesh, and since we have a great priest over the house of God, let us draw near with a sincere heart and full assurance of faith, having our hearts sprinkled clean from an evil conscience and our bodies washed with pure water.

- Hebrews 10:19-22

Most church members live so far below the standard, you'd have to backslide to be in fellowship. We are so subnormal that if we were to become normal, people would think we're abnormal.

- Vance Havner

Q. Why should a church refuse to be a 501c3? 

A. Becoming a 501c3 grafts an assembly of believers into the World System. Their devotion to God is compromised. No matter how much they claim they are devoted to God, their actions in this matter betray that claim in some measure.

Q. What exactly is a 501c3 anyway?

A. The Internal Revenue Code Section 501(c)(3) is designed to incorporate an organization as a non-profit institution for the purpose of providing exemption from income taxes and protection from personal liability, as well as a variety of other benefits. In return the organization makes a vow to refrain from partisan political speech and conduct. Nearly every church in the United States is a 501c3, and certainly all of the highly visible "mainstream" churches are.

Q. In what way is a church beholden to the World as a 501c3?

A. A church that applies for 501c3 tax-exempt status must inform the government about a number of things it does or will promise to do to qualify, and it does so by filling out any of a number of specific forms. One of those it may complete is a 1023 form, which asks about how much money a church receives and how it gets it, how much money it gives out, who gets paid and how much that is, along with dozens of other probing questions. Smaller charitable organizations may fill out the simpler 990 form.

Whatever official notifications are utilized, the openly transmitted information reveals things about the assembly that the government does not need to know, except to the extent that the church wants to sign on to government power over its affairs. This is similar to what Hezekiah did for the envoys of Babylon: he willfully showed them all his wealth so the Agency of Cain could make a claim of tribute on that wealth.

What makes this insidious is that the 501c3 church then places itself under the laws and bylaws of the issuer of incorporation. The assembly becomes a mere "God club," in essence a state-church. It is now under the presumption of living under the World System's law, coloring everything it does in every aspect of the assembly's life. True followers of Christ, however, live free from under the letter of the law that kills and is the power of sin. They are instead living in Christ's Truth and Grace.

Q. Does a church have to be a 501c3?

A. No. An assembly of believers can meet and worship God any time at any place they want to, as long as they are loving their neighbor in the process. An assembly wholly given over to Christ out of His love will have no problem in this task.

An important note should be made about the nature of the requirement. Some will say that in the eyes of the Internal Revenue Service, all churches are already 501c3's and that they don't even have to fill out a 990 or 1023. With this sales tactic the government may certainly seduce many into making it their lord, but the real question is who you are in God's eyes. The wording of this exposition is very clear. Churches may choose to fill out all the forms but they don't have to. Most lawyers enthusiastically encourage them to do so, for the purpose of removing any questions or doubts about the legalities church leaders are pressured to document.

It should be added that the federal government does require an organization receiving income to have an employer identification number so it can be assessed payroll taxes. This too is a questionable practice, for why should the employer be legally responsible for the taxes its employees are liable for paying? Obviously the government expects the organization to contribute to its employees' Social Security and Medicare contributions, but in the same context, why is the employer responsible for the retirement or health care considerations of the individuals under its employ?

Yes, federal law mandates all of this, and as legally binding as it all is, it still perpetuates a viciously codependent relationship between employer and employee. Please know that I believe any employer should provide whatever earned income a worthy and committed employee deserves for all his living needs including retirement. Does Caesar need to have his hands in it? Maybe he does! I just believe fully vested Kingdom people don't. Christ provides all good things and His genuine followers should be rigorously respectful of that abundance.

Q. Doesn't a 501c3 allow the church to be exempt from paying taxes?

A. The First Amendment to the Constitution states that the federal government (embodied in the U.S. Congress in this instance) cannot establish a religion and it cannot prevent the free exercise thereof. A group of believers meeting together may do so whether they pay taxes or not. In other words, even if the church does not pay taxes, the government may not stop them — the assembly may still gather and live out the expression of their faith. This is beside the fact that followers of Christ, obedient to Him, are protected by Him in this task — whether or not the Constitution says so.

Q. Doesn't a 501c3 allow tithers and givers to claim contributions as tax deductions?

A. When asked about paying taxes, Jesus asked a question in return. "Who do the kings of the earth demand tribute, from the sons or strangers?" "From strangers," was the reply. "Then the sons are free," Jesus said. You may find this principle in the 17th chapter of the book of Matthew.

The federal tax code must make provision for those free from tax liability, and it does so in a number of different places. For example, subchapter N, section 861 states that the only taxable income is that specified in the section, most notably foreign-derived income. Domestically-derived income is then exempt from consideration as taxable income. If a citizen obtains no income from a foreign source, and is not an employee of the government or a subdivision thereof, then he or she is not liable for paying federal income tax.

This is not a loophole or a trick, it is the federal tax law, codified by the U.S. Constitution itself (essentially stating that Congress cannot go beyond its duly entitled constitutional powers). However, many people pay income taxes by making themselves liable as non-resident aliens or government employees (which they do by incorporating their assemblies, whether commercial or ecclesiastical). No one is preventing them from doing so, not the least of which is the federal government.

This is beyond the more important fact that the reason people should be giving to the church is to sow kingdom work, not to get a nice discount on their taxes. Indeed one should probably think carefully about Jesus' exhortation against letting the left hand know what the right hand is doing when one gives and then announces the amount of that giving to the World.

Q. Doesn't a 501c3 allow the corporation's employees to have certain benefits, like a housing allowance?

A. Why does a pastor or other vested church laborer need such a benefit from the government? Why don't the people of the congregation they serve provide any such benefit themselves? In a real sense this reveals the bankruptcy of this tool of the System: people who should be trusting wholly in God's bountiful provision, living out of an impoverished mentality from which they believe the government must provide something they couldn't have otherwise.

Much of this comes out of a gross misconception about value. The value of a government discount doesn't just come from a vacuum. Caesar must confiscate value from another source to afford it to the 501c3 pastor. When you think about it carefully, isn't the mentality here, "Let's get this from the government so we can somehow have more than we could have if we didn't"? Sadly, the "more" is just a vanilla-frosted covetousness.

Q.  Doesn't a non-profit get other advantages by proclaiming themselves as such, like eligibility for grants, bulk mail rates, exemptions from state sales taxes, and so forth?

A.  By now it should be clear that every single one of these items can be provided by generously giving believers in an assembly. It should also be obvious that the very existence of all these "benefits" and "discounts" means that the government is actually selling something, and as such the church does not have to buy! Indeed it is feasible that none would be buying if it weren't for all the perks! This should make us think again about the meaning of being made merchandise of men.

Q.  Isn't the essence of the non-profit exactly what it says — to prevent someone or some powerful group in the organization from unduly profiting from its success?

A.  If the answer the 501c3 advocate gives to this question is, "There just aren't enough people out there who would really refuse to exploit people, so we'd better cover our backs," then I can't help but be terribly sad. If indeed true, then it is harrowing to think that when Jesus said, "Why do you call me 'Lord, Lord,' and do not do what I say?" he was speaking to so many. This is not rocket science: followers of Christ who are considered powerful or have influential positions should refrain from exploiting people because they love them, not because the government has a law against it.

Q.  Isn't an advantage the accountability a church can have?

A.  We seem to be convinced that a 501c3 contract somehow makes a non-profit reputable, on the "up-and-up," an organization worthy of receiving our donation. This concern sometimes comes with the fear that the money will be used for "non-charitable," questionable purposes. It must be asked again, what or even who makes an organization legitimate?

Establishing vigilant, visible, and responsible accountability relationships is certainly biblical, but note the difference in approaches. The godly institution asks for accountability by declaring, "Watch us, because as humans we may make a mistake." The worldly institution does so by saying, "Watch us, because as sinners we may exploit people." This actually reflects the condition of avoiding accountability and an admission one needs the law to keep things straight. Virulent Catholicist sentiments have convinced so many sincere followers of Christ that the excuse "I'm just a sinner" is a convenient way to put oneself under the power and force of the law. Maybe I missed something here, but didn't Jesus die to take out all of our sin? To get us to love, and in that, to live joyously together in grace and truth?

Q.  Non-profits have always had the reputation of being right and wholesome. Isn't that a good thing?

What is so good about being "non-profit"? The World System has done an ingenious job of convincing people that non-profit = good and for-profit = bad. What many don't realize is that non-profits simply factor in all the benefits its leaders appropriate as part of its permitted cost configurations. Often it's a lot of money! Then they can simply say "See, no profits!" If you could look behind the scenes, you'd find that they can be just as deceptive and exploitive as any other organization.

What's more disheartening is that most pastors and church elders don't seem to realize that when they sign the contract, they are violating Jesus' precise commands against making pronouncements regarding how good you are at giving. The form essentially asks, "What good things do you do to qualify you as a non-profit?" and "How much of your income do you give away?" There are even strict rules they must follow about their income and what they do with it in order to be officially classified "non-profit."

Didn't Jesus say, "When you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by men"? Didn't He declare unjustified "the Pharisee [who] stood up and prayed about himself: 'God, I thank you that I am not like other men — robbers, evildoers, adulterers — or even like this tax collector. I fast twice a week and give a tenth of all I get'"?

Q.  Won't terminating a 501c3 drive people away from our church?

A.  Those who desire genuine intimacy and fellowship with Him will stay. People in a God club will want to stay in a God club, and if you turn your God club into a vibrant church many will leave to find another God club. Many of Jesus' disciples left Him when He told them the truth about who He was. What is the truth about who you are and what your assembly is?

Here is a page with more details about what it means to a worship assembly ungrafted to the World System.

Q.  You don't seem to understand — this is the real world. People just won't give money to organizations that aren't 501c3. How will we sustain ourselves if we don't get funded?

A.  Think about this in the simplest terms. If someone comes up to you and says, "Here's x amount of dollars for your ministry. How do I know you will use it properly?" What are you going to say? As it is, virtually every ministry holds up a piece of paper that says, "Here's the law we've obligated ourselves to — see, we're legitimate." Why can't followers of Christ say "Jesus Christ is my seal of approval. I am accountable to Him, and as such you can fully trust that we'll do what we say we'll do with your money." God tells you to do as much in His word! Read the first few chapters of the second letter to the Corinthians to see it, it's right there.

Why don't we say this to people? It is because too many in the past have claimed that they were His when they weren't. Too many in the present do that too — they are Catholicized, pretending to be Christians but following another Jesus. As such all who say they're on Jesus' side can't be trusted.

Therefore, it is simple. It would take a lot of people actually following Christ to do the right thing with donations for those Christians to be trusted again. Being intractably aligned with a system that essentially declares "We can't be trusted and here's the document that proves it" does not engender that kind of a relationship.

"Oh, but what about the money?" you may cry, "Too many will still not give..." Think about it, if God really wants your ministry to go, don't you think He'll make it go? Shouldn't we be doing what the Acts 2 church did anyway? God is more interested in your faithfulness than He is about your running around trying to earn His favor making sure your ministry is funded. Or, to put it another way, what would you rather have, people seeing Christ and His love in what you do, or people seeing your ministry as just another one of the thousands of God clubs that tries to do really nice things?

I should briefly add a comment about the concern people have that the IRS will look unfavorably on large donations to non-501c3 entities. First, why would the IRS feel that way? Look at the issue about trust just addressed above. Secondly, is there a reason the IRS should be suspicious? Are you in fact laundering money in some way? If so then you should go to prison. If you aren't, then what is your concern? If indeed you are righteous by the blood of Jesus, why do you so fear being lumped in with all those who do deceitful things?

Q.  You keep using the term “God club.” What exactly is that?

A.  I use the term to describe a Christian assembly that is so bound to the World that it is no different from any other club. The club may be engaging. It may be exhilarating. It may be a great thing — great people, great activities, great music and food and fun. Hey, it’s a club! It may even say and do all kinds of God-oriented things. But as long as it is contractually beholden to the World, most notably as a 501c3 organization, it will never be a full-on God-filled life-changing church.

Please do not think I dismiss God clubs so readily. In many of them, the word is read and preached. Many members love God, and love another charitably. They love a lot of people charitably. Because of these things people do come to Him. I can’t deny myself that I’ve come to Him, come to learn more about Him, and come to desire more of Him, because of some significant things said and done in God clubs. But this does not change the nature of what God Himself desires of His people. Seeing in the Bible how much He wants us to actually do what He says, how much He wants us just to trust in Him, I am convinced He does not want us to stay in God clubs as if they were churches.

The main reason for this is not hard to understand, especially for those who truly know what goes on in the darkness of God clubs — those who've seen it or even been wounded by it. People seeking their salvation from the World are still sinners, and still do things to wreck their lives and their relationships. A classic characteristic of the Catholicist church is the practice of doing horrifically manipulative things in the dark and doing cheerfully charitable things in the light. It is the mentality that a few more good works will cover for those bad things. This is the way of the World, of Rome, of the Catholicist Nation. It is not the way of God.

Q.  Isn't a 501c3 an important part of financial stewardship, for both the church leadership and the flock?

A.  This idea comes from the conception that it is the World System that is the one that makes your value. Now, for the intractable Catholicist, it's all he's got. But for the authentic follower of Christ, this is a lie readily embraced because it is so pervasive and they've been managing their affairs by it for so long. Many who claim to be Christians will declare their undying allegiance to the God who redeemed them, and then put their full trust in the law to check their fears about others exploiting their value in the financial arena. This is not characteristic of a loving body of genuine believers, all of them bought by His blood from His love.

Q.  How, exactly, does a 501c3 commitment keep a pastor from saying what he wants about Jesus and the gospel from the pulpit?

A.  Many times a pastor will add to this, "What do I have to worry about, I'm not going to do any of that political activity anyway." The problem is that when a 501c3 assembly signs on to the requirement that it avoid any partisan political activity, it is ceding to the government the decision about what to say. In other words, it makes no difference what you plan to say, you've put yourself under that authority of a power that has already dictated what you can say ("Jesus is Lord"), and what you can't say ("Vote for Smith"). You have given to Caesar what should be God's.



501c3 Q & A  Part 2    |    Menu of Questions

A Letter to a Church Pastor

For more on the meaning of living under Christ's Truth and Grace in contrast to the law, click here.

For more elaboration on the nature of the Catholicist Nation, click here.

A real-life instance of the state-church body of death is here.



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About the author of this Q & A

Chapter 6 >> Chapter 7 >> Chapter 8

(Note there is a second part of "Chapter 7")


This Q & A is divided into two parts merely because of its length.

This page was originally posted by David Beck at yourownjesus.net on October 9, 2004