Can My Newly Formed Not-for-Profit Organization Begin Operations Before Receiving Tax-Exempt Status?

Yes, generally a Not-for-Profit Organization can begin operations before receiving tax-exempt status. Recognition is usually effective retroactive to the earlier of: 

  • the date of the Organization’s legal formation, or 
  • the beginning of the Organization’s programs. 

Therefore, the Organization’s activities are retroactively tax-exempt and donations are also retroactively tax-deductible to the donor.

Note: in order for the program date to be considered the effective date of tax exemption, there must be an organizing document of some kind. Signed minutes from an organizing meeting of the board of directors may be sufficient.

If you are part of a newly formed Not-for-Profit Organization and would like assistance with making sure your Organization is on the right track, contact us today.