Why 501(c)(3) status matters for Abide in Love affiliates

If your affiliate will accept donations, 501(c)(3) recognition (or another compliant structure) is the cleanest way to do so legally and transparently.

Here’s what it does for an affiliate:

• Makes donations tax-deductible for donors (a big factor for many individual donors and almost all foundations/grants).

• Signals legitimacy and accountability (especially important when your work involves vulnerable communities and restricted settings like detention).

• Separates the affiliate’s finances from any one individual so money isn’t flowing through personal accounts (which creates tax risk, trust issues, and messy recordkeeping).

• Unlocks nonprofit banking and basic infrastructure (nonprofit checking accounts, donation platforms, sometimes reduced rates for services).

• Helps protect the mission by legally dedicating the organization’s assets to charitable purposes (and preventing “private benefit” problems).

• Often required for fundraising compliance: many states regulate charitable solicitation (fundraising) and expect a formal legal entity behind it. National Council of Nonprofits

Important note: Forming a nonprofit corporation in your state is not the same thing as being a 501(c)(3). Incorporation is a state step; 501(c)(3) recognition is a federal IRS step.

Two common paths for affiliates who will accept donations

Path A: Become your own 501(c)(3) (independent nonprofit)

Your affiliate becomes a fully independent nonprofit with its own board, bank account, and filings.

Path B: Use fiscal sponsorship (donations flow through an existing 501(c)(3))

Some affiliates are already connected to established organizations—such as churches, community groups, or immigrant-support nonprofits—that hold their own 501(c)(3) status. In these cases, fiscal sponsorship can be a short-term or long-term option that allows work to begin more quickly while reducing administrative burden.

However, it is important to understand what fiscal sponsorship does—and does not—allow within the Abide in Love network.

Abide in Love does not sponsor affiliates

Abide in Love does not provide fiscal sponsorship for affiliates and does not allow affiliates to fundraise under Abide in Love’s 501(c)(3).

This means:

• Affiliates may not accept donations on behalf of Abide in Love.

• Abide in Love cannot process, hold, or report affiliate funds.

• Abide in Love cannot authorize affiliates to use donated funds for local program expenses under our EIN.

This boundary exists to protect both the central organization and affiliates from legal, financial, and reporting risk.

When fiscal sponsorship is appropriate

Fiscal sponsorship may be appropriate if:

• You are already part of an organization (e.g., a church, nonprofit, or community group) that:

  • holds its own 501(c)(3),

  • understands and agrees to fiscal responsibility for your affiliate,

  • and is willing to enter into a clear written agreement regarding use of funds.

• You want to raise money for Abide in Love (the central organization), and:

  • the sponsoring organization will pass those funds directly to Abide in Love, or

  • donors are clearly told they are giving to Abide in Love’s work generally, not to a local affiliate program.

In this case, the affiliate functions primarily as a fundraising or awareness-raising group, not as a local service-delivery organization.

What fiscal sponsorship does not allow:

If you are operating under a fiscal sponsor and do not have your own nonprofit status, you may not use donated funds to run local Abide in Love programs. Specifically, sponsored affiliates may not use funds raised under another organization’s 501(c)(3) to:

• operate a pen pal program,

• purchase postage, supplies, or printing,

• create or distribute care packages,

• provide commissary support or direct aid,

• or otherwise spend funds locally at the affiliate’s discretion

If you want to do local program work

If your goal is to:

• run a pen pal program,

• send care packages,

• provide financial or material support to detainees or their families,

then fiscal sponsorship alone is not sufficient unless the sponsor fully adopts those programs as its own.

In most cases, the recommended path is Path A: Form your own independent 501(c)(3)—so that donations raised locally can be used locally, transparently, and sustainably.