501(c)3 Yes or No ?
Believe me when I tell you this has been a VERY tough decision. There are of course advantages and disadvantages to everything, especially when it comes to charitable organizations. I have been vacillating on this for well over a year and have put a lot of thought into it.
Advantages
Contributions are tax deductible
Can apply for grants and large donations
People believe this makes it legitimate
Disadvantages
IRS Charges $850 a year for the 501(c)3 status
IRS controls who is on the board
IRS controls who the money is distributed to
IRS determines what you may spend the money on
IRS may revoke the 501(c)3 status for many reasons which are poorly defined
In my opinion the disadvantages far outweigh the advantages to being an IRS approved (501(c)3 charitable organization. Therefore I decided to set up this charity as a for profit company which pays taxes, although taxes are only paid on profits which will be negligible. Not being an IRS approved charity gives us a lot more flexibility in the things we can do to raise funds too.
