501(c)(3) Regulations for Animal Rescue in Illinois

By Beverly Bird

Sometimes the Internal Revenue Service and basic human kindness find common ground. The federal government classifies animal rescue operations and shelters as “not for profit” organizations. In Illinois and elsewhere, this increases the likelihood that individuals make donations that allow the organizations to continue saving animals.

Sometimes the Internal Revenue Service and basic human kindness find common ground. The federal government classifies animal rescue operations and shelters as “not for profit” organizations. In Illinois and elsewhere, this increases the likelihood that individuals make donations that allow the organizations to continue saving animals.

IRS Rules

Section 501(c)(3) is part of the federal Internal Revenue Code. Under the code, not-for-profit status requires that all revenue coming in to the rescue shelter must go toward its costs of operation. No single individual can gain from the money. Lobbying is prohibited. The shelter can’t endorse a political candidate who promises he’ll initiate laws to save animals. It can’t donate to political campaigns. If your shelter meets these criteria, you can apply to the IRS for not-for-profit status. You can use your IRS approval to qualify for not-for-profit status in Illinois as well. Section 130.2007 of the Illinois Administrative Code relates to charitable organizations and nonprofits. You must provide your organization’s financial statements and a summary of how your operation works.

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Shelter Policies

The IRS and the Illinois Department of Revenue don’t involve themselves with how a rescue organization provides for the animals it takes in, except that its revenue must go toward upkeep of the facility and the pets. However, many of these organizations, such as Illinois Animal Rescue and Central Illinois Small Animal Rescue, are “no kill” facilities. They care for the animals they take in until they find each a suitable home. They accept donations of your time, effort and tangible items, such as supplies, as well as money. Veterinarians often donate their skills and their time. These organizations make ends meet entirely through these donations and adoption fees.

Benefit of Donations

Because of their 501(c)(3) status, items and money given to these rescue missions are tax-deductible to the donor. If you give such a shelter money, whether it’s an adoption fee or a cash donation, you don’t have to pay taxes on that portion of your income. This may entice individuals who would not donate otherwise.

Precautions

Having 501(c)(3) tax status does not guarantee that a shelter is legitimate. According to the ASPCA, some individuals have applied for and received this status, but use it only in an attempt to legitimize taking more and more animals into their homes. They don't intend to put these pets up for adoption. Generally, pets belonging to these “animal hoarders” live in deplorable conditions. The owners cannot afford to care for and feed all of them and they don't actively solicit donations. They don’t want people to know how their animals are living, so they often volunteer to pick up an unwanted pet rather than have the owner deliver it to their home or facility. As a precaution, always visit the rescue mission to which you’re considering donating. Make sure it really is what it says it is and that your money is doing some good.

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Can a 501(c)(3) Donate to a 501(c)(4)?

References

Related articles

How to Start a 501(c)(3) Nonprofit Rescue

Starting a 501(c)(3) rescue is a great opportunity to help animals in need, saving them from kill shelters and getting them connected with people who want to adopt them into forever homes. After you've checked with other animal shelters in your area to make sure you're not duplicating efforts, you'll be ready to begin a series of state and federal filings that will keep your animal shelter tax-free.

Pros & Cons of the 501(c)(3)

There are more than 1 million 501(c)(3) organizations, otherwise known as nonprofits, in the United States serving a variety of charitable causes. The process of becoming a nonprofit is time-consuming and should not be entered into lightly. When evaluating whether to become a 501(c)(3), consider what your organization’s goals are and how your business plans to get money. These are two factors that should assist in determining whether your organization should file to become a 501(c)(3).

Regulations for 501(c)(3) Donations

One of the main benefits of creating a 501(c)(3) nonprofit organization is the ability to accept tax-deductible donations. The IRS designation 501(c)(3) indicates that the nonprofit is exempt from federal tax. However, in order to stay exempt and ensure donors can deduct their donations, it is essential to follow the IRS rules for written disclosures, record-keeping and annual reports.

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