What are the benefits of an organization having a tax-exempt status?
Many organizations see the financial benefits of tax-exempt status. In addition to qualifying for public and private grant money, most nonprofit groups seek the status to obtain exemptions from federal and state income taxes, and therefore can devote a larger proportion of their resources to achieving their particular goals. The status can also be beneficial to those groups who’d like special rates for services such as postage. Also, donors prefer to give c ontributions to these groups because they can deduct their gifts on their own taxes. On the other hand, the IRS restricts lobbying activity, political activity is prohibited, and the organization’s activities must be limited to the charitable purpose. Each individual group must weigh the pros and cons of the status carefully in light of their organizational goals and values.
