Is it biblically acceptable for a church to seek 501(c)(3) incorporation?

what does the bible say?

The Bible does not forbid churches from using legal structures like 501(c)(3) incorporation, as long as they remain ultimately accountable to God. Even in the Old Testament, God’s people were to manage resources and organize responsibly for His work (Exodus 25–30; Numbers 4). The New Testament affirms obeying civil laws in a godly way (Matthew 22:21; Romans 13). While nonprofit status was not a Bible-era issue, incorporation today can help churches operate legally, manage finances, and facilitate giving, without compromising their witness. Churches must always prioritize God’s commands over human laws (Acts 5:29), and legal structures should serve ministry purposes. Seeking incorporation is a practical tool for church organization.

from the old testament

• The Old Testament does not directly address modern legal structures like 501(c)(3) incorporation, since these are civil constructs developed long after biblical times. However, it does provide principles about how God’s people are to conduct their affairs. Israel was under God’s covenant and ultimate accountability was to God rather than human systems (Exodus 19:5–6; Deuteronomy 6:5).
• The Israelites were instructed to organize and manage resources, offerings, and property responsibly for the work of God, such as in the tabernacle (Exodus 25–30; Numbers 4). Doing so showed the importance of structure for ministry purposes, although not to the government.
• While the Old Testament primarily focused on God’s law, it recognizes that civil leaders exist (Exodus 18; Deuteronomy 1:13-17, 16:18), suggesting that practical governance and legal compliance are part of orderly living.

from the new testament

• In Matthew 22:21, in discussing paying taxes, Jesus taught, “Therefore render to Caesar the things that are Caesar’s, and to God the things that are God’s.” As individual believers, we’re to pay all appropriate taxes to governing authority, as required by law. But under 501(c)(3) incorporation, organizations, such as churches, do not legally have to pay taxes, and there’s nothing untoward about that as it is morally neutral and legally acceptable.
• John the Baptist also taught repentant tax collectors only to, “Collect no more than you are authorized to do” (Luke 3:13). U.S. churches with 501(c)(3) incorporation are tax-exempt, so no subterfuge or thievery is happening by claiming that incorporation.
• Romans 13 affirms the importance of obeying the laws of one’s culture. In all of these cases, we find ample evidence to support working within the laws of one’s society to operate in a legal and ethical manner. The 501(c)(3) incorporation is both legal and ethical.
• Some have argued against nonprofit incorporation based on 1 Corinthians 7:23 that states, “You were bought with a price; do not become bondservants of men.” However, this verse cannot be properly applied to this topic. This passage dealt with the concept of human slavery rather than church organization.

implications for today

In the United States, 501(c)(3) incorporation is generally used by churches and other nonprofits as a legal structure under which they operate. This nonprofit status or anything similar to it did not exist during the New Testament period. There are no biblical commands that require a church to become a legal nonprofit under this structure. However, any nonprofit group that intends to grow and maintain a regular structure that includes bank accounts and donor reporting must choose some legal structure under which to operate legally. The benefits of incorporation include the ability to offer tax deductible giving to church members, as well as nonprofit status for the church. Some see incorporation as negative, however, thinking it limits the ability of the church to speak out on sensitive political issues. While this could become a potential future problem, churches should not generally fear this issue. Churches have been able to speak out on all sorts of issues throughout American history and have not experienced problems with their nonprofit status. What if the government someday requires an action that is at odds with biblical commands? Acts 5:29 is clear, “We must obey God rather than men”! However, except in such a case, there should be no reason to generally fear applying for nonprofit status as a church. For those who still have concerns, 508(c)(1)(a) tax-exempt nonprofit status is an option. Those with questions regarding the appropriate choice for their church should consult a nonprofit attorney.

Recap

understand

• The Bible allows churches to use legal structures like 501(c)(3).
• Incorporation is a practical tool for managing resources and facilitating giving.
• Churches must prioritize God’s commands over human laws, ensuring legal structures serve ministry, not hinder it.

reflect

• How do you personally view the balance between obeying God and following civil laws in church matters?
• How would you respond if a legal requirement for your church conflicted with God’s commands?
• How can you support your church in using practical tools like incorporation while keeping God at the center?

engage

• How can understanding biblical principles for organization help us evaluate modern church legal structures?
• How might legal incorporation help or hinder a church’s mission and witness?
• How can we encourage our church leaders to prioritize God’s commands above civil requirements while responsibly managing resources?