Nonprofit Status

Understanding AHA's Group Exemption: Your Path to 501c3 Status

What is a group exemption? AHA is a 501c3 organization with group exemption status with the IRS. This arrangement is an administrative convenience for both the IRS and organizations with many affiliated entities. As a "subordinate organization" under AHA's group exemption, your group can receive 501(c)(3) status without filing a separate application with the IRS. Consequently, your group will not receive an individual exemption letter from the IRS, you'll use the AHA's instead, which we will provide to you.

Who qualifies for AHA's group exemption? Only legitimate nonprofit organizations that align with AHA's purpose and mission are eligible for status through our group exemption. AHA reserves the right to reject any organization that does not meet our requirements or purpose for nonprofit status.

How to obtain nonprofit status via AHA:

1. Online application first. Submit your application through our online form, linked here. 

2. Adopt bylaws that comply to AHA and IRS requirements. 

• Use ours as an example! Here is a link to the AHA bylaws. This can be a great template to work from. Due to IRS regulations, your bylaws must be substantially similar to ours. 

• Essentials for IRS compliance:

1. A purpose statement that is similar to AHA's mission

2. A statement affirming that your organization is affiliated with AHA

3. A clear definition of your board of directors: no fewer than three unrelated individuals, elected at least every other year

4. A guideline for how your board members will be elected and what their terms will be

5. A statement that your fiscal year will be January 1 - December 31 (to match AHA's)

6. A Conflict of Interest Policy with disclosure requirements for your board. 

3. Obtain an EIN: Secure a federal employer identification number (EIN) through the IRS. Click here to learn how to apply for an EIN. 

4. Draft a request letter: Draft a letter, signed by an officer, requesting tax-exempt status under the AHA group exemption. It must include (ideally in bullet points)...

• Your EIN, official name, and address

• Your fiscal year (January 1 - December 31)

• A statement that your organization is not a private foundation. 

• A statement that your organization has not been previously rejected for tax-exempt status

• A statement that your organization agrees to abide by AHA and IRS nonprofit policies

• A statement of purpose reflecting your bylaws

5. Submission: Submit your request letter, bylaws, and conflict of interest policy to grassroots@americanhumanist.org. 

6. Review and Approval: Your documents will be reviewed, and you will be notified of any necessary changes. Upon approval, you'll receive a confirmation letter stating that your chapter is exempt from federal tax under our group exemption. We will send a copy of the AHA's federal nonprofit determination letter for your records. At times, both letters will be needed to prove nonprofit exemption when working with local government or corporate entities. 

Know the lingo! "Through the American Humanist Association, our chapter is a tax-exempt nonprofit organization."

Maintaining your nonprofit status:

Securing your 501c3 status through AHA is just the beginning; ongoing compliance is the key to maintaining it.

Adhere to the following guidelines to ensure that your group remains in good standing: 

• Annually complete the chapter census: Chapters and affiliates are required to update information annually. It's even more important for chapters using AHA's group exemption to keep this info up to date. Failure to update within a calendar year will result in your group being dropped from the group exemption.

• Annual IRS tax filings: All nonprofit organizations are required to file an annual tax return Form 990 with the IRS. Failure to submit these annual tax returns can lead to automatic revocation of your nonprofit status by the IRS.

Please note: Due to federal law, AHA cannot reinstate your organization if the IRS revokes your status. 

• Maintain your Board of Directors: Ensure your board always has independent, individuals elected no less than bi-annually. Annually report the contact information for each board member through AHA's Chapter Census Form. 

• Annual financial reporting to members: Provide an annual report, including financial statements, to grassroots@americanhumanist.org for record retentions and IRS compliance. 

• Bylaw updates and review: If you update your bylaws after their initial filing with AHA, you must provide the updated bylaws to AHA for review and approval. This ensures continued compliance with AHA and IRS requirements.