The Administrative Process to Start
Everyone loves to do administrative work, right…
This kind of work can be daunting, or even boring, and probably not your top priority when starting a church. Rest assured, we will walk you through each step in this process, but if you’re curious about what comes next, please read on.
The last article gave an overview of the process to start your Promise Fellowship assembly in your home, with your family and friends. As we discussed there, the most important step in the process is prayerfully considering whether God is leading you to start a micro-fellowship. That is why our process to help you get started focuses on that before getting into the nuts and bolts of forming your local church legally.
A Brief Overview of the Process (you’ve already done a lot!)
Prayerfully consider if God is leading you to start a micro-fellowship.Gather your family and friends for your first meeting.Go through a six-week series as a trial run.Decide to launch your micro-fellowship, and start official onboarding.- Work with The Promise Fellowship to legally set up and run your assembly.
These administrative details can seem a bit confusing, or cumbersome, but we are here to help walk you through the process, and after you have decided to commit to host a micro-fellowship, all the remaining steps in the process are just “logistics.” They won’t be difficult at all.
1. Affirm Our Doctrinal Statement
This part of the process is really just a formality, since considering biblical doctrine, and whether you and your assembly members are aligned to The Promise Fellowships Statement of Faith, was really the emphasis of Phase 1.
All we’ll do here is provide you with a copy of the Statement of Faith for you to do a final read-through, then sign it and send it back to us. As always, if there are doctrinal questions or concerns that arise, we are more than happy to talk through them with you.
2. Set Up Your “Online Presence”
This is where things can get a little complicated if doing things online isn’t your favorite thing, or if you just don’t have a lot of experience with it. That being said, this part isn’t even really required, but we’ve found it extremely helpful to complete. We have all the technical assistance you need, and a web developer who can set everything up, and work with you on each item.
You’ll get an official @thepromisefellowship.com email. There’s absolutely no requirement for you to exclusively use this email. But, there are a lot of community organizations and charitable foundations out there who are willing to give small financial grants to local churches; especially those who are committed to investing in their local communities. Having an official email address actually goes a long way in establishing credibility.
Our main website is thepromisefellowship.com, but your micro-fellowship will be set up as its website, connected to the main site. If we could imagine that the Apostle Paul had the internet, his “home base” at the time would be the “main site,” and the churches at Ephesus, Rome, Colossae, and all the others would be like your micro-fellowship.
On your site, you’ll have the ability to publish contact information for people who are eager to join you, and you can even post blog articles for things that you’re studying or even lessons or sermons that you have prepared. Again, none of this is required, but in the digital age, we have such wonderful resources at our disposal to connect with and reach others.
3. Legally, Form Your Church
This is where the process will begin to vary a bit depending upon which state you live in. Generally speaking, the process to legally form a local church is the same, but you’ll need to follow the requirements of your state.
What you will be doing here is forming a “corporation” as a 501(c)(3) nonprofit. There are several types of nonprofits out there, but for government and tax purposes, churches fall into the 501(c)(3) category. This is the only step that churches need to do for tax-exempt status. The IRS doesn’t even require any additional documentation. Churches are automatically tax-exempt!
For example, we are based in Colorado, and the process here is pretty straightforward. All that is required is picking a legal name for the organization, and filing Articles of Incorporation and By Laws. There is a $50 fee in Colorado to file, and an annual requirement to validate that the organization is still in operation. Your state might be a little different, and you’ll be able to find those requirements on your state’s Secretary of State page.
Moreover, this link gives a quick outline of those requirements in each state. Forming and Maintaining a Nonprofit – State by State Guide – Foundation Group® (501c3.org)
Please don’t let this part of the process scare you. We will walk with you each step of the way to help you navigate getting the documents submitted. In pretty much every state, however, you’ll need to file Articles of Incorporation and By Laws. We have templates for you to use that have almost everything that you need already written.
Articles of Incorporation
The Articles of Incorporation state the legal name of your assembly, and other administrative details. Most of the details will be specific to your assembly, but some details are standard for forming a 501(c)(3). We have a starter template for you to use, and we can help you modify your Articles of Incorporation to get them filed.
By Laws
This second document is essential. The By Laws for a nonprofit outline the purpose, goals, and mission. This is also where you’ll need to outline your beliefs and doctrine. From a legal perspective, the term “church” is broad, and generally not specifically defined. So, you need to clearly specify what you believe in. As believers, we always want to be above-board about what we hold to be true. Especially in this world, and when dealing with the government, we ought to be completely transparent with our beliefs.
For the most part, the statement of belief and doctrinal items in this document will be the same as the broader Statement of Faith that you affirmed after the onboarding process. The only things that you might need to adjust will be the section that deals with the civil, and the ecclesiastical structure of your assembly. Again, we can help you think through these items, and provide a template for the majority of this document.
While legally, there are only certain details that are required to form a 501(c)(3), it is best to try to be as detailed as possible. This step in the process might be the most time-consuming, but the good news is that a church is allowed to operate as a tax-exempt entity for up to 27 months before needing to have all of their documents filed. We’ll help you work through this, and there is plenty of time to make sure all the requirements are met.
Once all of that is done, congratulations! You’re finished with the most complicated part of the administrative set-up process.
4. Apply for an Employer ID Number
Once your micro-fellowship is formed as a church as a 501(c)(3) nonprofit, you are now officially a “business,” and this affords you some other advantageous opportunities. The first one is applying for an Employer Identification Number (EIN).
As a church, this is really the only form that you need to file with the IRS, and it is needed for you to set up a business bank account. This will be important when it comes to the offering from your assembly, and ensuring that you can manage those gifts both faithfully, and legally.
You can do this online and should get your EIN back the same day. How to Apply for an EIN | Internal Revenue Service (irs.gov)
One of the legal requirements for a nonprofit is ensuring that nobody personally benefits financially. So, with the EIN, you can set up a business banking account, instead of having members in your assembly tithe to you personally. Even if you faithfully use those gifts, having that money donated directly to a business bank account protects you from any misperception that you are financially benefiting personally from your assembly.
A great way to keep your giving finances managed properly is with a business checking account.
5. Open a Business Bank Account
This step is simple. Your new EIN allows you to apply for a business bank account at any bank or credit union that you want. However, there are different kinds of business checking accounts. Some have monthly fees, and some also charge a transaction fee because it is a business account. But there are many options for banks that do not have those charges. If you need a list of recommendations, we’d be happy to provide some.
If you choose a bank that doesn’t have a local branch near you, you’ll want to make sure you can do things like mobile check deposit, or be able to deposit cash at ATMs.
Set Up Online Giving (Optional)
There are plenty of options here, and it’s not really required but can be very helpful. For giving, there are several ways that you can accept tithes digitally that go directly into your new business bank account. Platforms like PayPal, Venmo, or Zelle are suitable options, but these all will deduct a transaction charge.
Another platform, Zeffy, was created specifically for nonprofits, and does not deduct a transaction charge from each tithe. As a 501(c)(3), you can set up your Zeffy account, connect it to your bank account, and put a link on your website, or share a QR code with the members of your assembly for giving. If you’d like help with this, we would be happy to support you in setting this up. Is my organization eligible to use Zeffy?
At this point, you are finished with all the required and recommended administrative setup. The next step is optional.
Apply for Formal IRS Tax-Exempt Status (Optional)
As we mentioned earlier in this article, the IRS recognizes legally formed churches as tax-exempt automatically, so there is no actual need to complete this application. According to the the IRS, some churches may choose to do this to provide their members with an additional level of confidence that the church is keeping up with IRS requirements.
A reason you may consider this is if your micro-fellowship grows and the operations become more complex. Even then, it’s not required, but it can help you keep up with the reporting requirements for accounting and bookkeeping that the IRS has.
This is probably not something you need—or want—to do at this point, just something to keep in mind. It is also quite costly to apply. In 2024, this application fee is $600.
Manage Your Bookkeeping
Unless you happen to be an accountant, being a “bookkeeper” might not be something you ever thought you’d do. But, tracking finances for your Promise Fellowship assembly is no more complicated than managing your personal finances. Actually, it’s much easier.
Even though churches don’t need to apply for tax-exempt status, and not required to file the same annual reporting forms, you still need to stay on top of your church’s finances.
Depending on your situation, there may be some reporting that becomes necessary, but that will likely not be the case until much further down the road. If you ever have questions about that, we can either find the answer for you, or find someone who can. We are here to help.
The only reporting that you need to complete each year are your Annual Giving Statements that you’ll provide to those who contribute financially to your micro-fellowship. A church is automatically tax-exempt, but those individual gifts are not. And for your contributors to be able to deduct those gifts from their taxes, they will need a receipt of their financial contributions.
Throughout the year, you’ll need to keep track of who gives to your micro-fellowship, and how much. There is no single way that you have to do this. Accounting software is great, but it can be overkill. A good old-fashioned Excel spreadsheet works just fine. We even will have a template for you to use.
At the end of the calendar year, all you’ll need to do is provide each financial contributor with a statement of their giving for that year. We also have a template statement for you to use that has all the information required by the IRS. All you have to do is copy and paste the actual numbers from your spreadsheet.
That’s It!
Whew, that’s it for the set-up! This all may seem like a lot—and to be honest—it is.
But, by going through this process, hopefully you not only feel confident that you are set up for success, but that you know that you aren’t alone.
We are always here to help in any way that we can. We are so grateful and blessed that we can be a part of supporting you to build up the body of Christ by serving God and others, and teaching His Word faithfully.
If you aren’t sure about starting a Promise Fellowship, we hope that these articles help relieve a bit of the overwhelming thoughts you may have. If you’re interested in starting a micro-fellowship, or if you have further questions, please contact us!