By becoming a faith-based organization (FBO), some financial advantages may apply to the business. A variety of businesses can be affiliated or associated with religious congregations and purposes, and by doing so there are some primary considerations to be made in terms of donors, stakeholders, funders, and more. To protect the organization, ensure they are equipped with Nonprofit Insurance for Religious Institutions.
About Money, a financial services website, says the types of organizations that qualify as FBO’s are religious congregations, organizations that are sponsored by religious congregations, nonprofits founded by religiously-motivated incorporators, and collaborations of organizations that clearly and explicitly includes organizations from the previously described categories.
Some benefits of these organizations include tax breaks under the IRS code Section 501(c)(3) and hold certain requirements that limit audits from the IRS.
While some organizations that identify with a certain faith may not be eligible for receiving grants by opposing foundations, those with similar interests are likely to donate to them. For example, in a recent study, the Cleveland Foundation found that 12% of community foundations expressed interest in funding both social services and religiously affiliated organizations.
Further, the Charitable Choice law, signed into law in 1996, bans religious foundations from being excluded from federal funds solely based on faith. Therefore, these foundations are able to acquire federal funds in the same way nonreligious companies do.
At Charity First, we proudly serve the religious sector with specific policies that are tailored to meet their risk exposures. Our policies include general liability, corporal punishment, pastoral and counseling liability, and more. For more information, contact us today at (800) 352-2761.