Starting a Church & 501(c)(3)

The First-Year Checklist for a Newly Formed Church

Published 2026-09-10 · Starting a Church & 501(c)(3)

Short answer: the first year of a new church has four blocks of work. Organize the corporation (bylaws adopted, officers elected, records book started). Set up money (EIN, bank account, financial controls, donor receipting). Set up people (compensation decided in advance, worker classification, safeguarding policy). Then set the annual rhythm (state filings, board calendar, insurance review). Most of it is administrative, none of it is expensive, and almost all of the pain new churches feel comes from doing it late rather than doing it wrong.

You filed the articles. There was a moment of relief, and then a slow realization that nobody handed you a list. You're preaching Sunday, you have a bank appointment Tuesday, someone gave $2,000 and wants a receipt, and a volunteer just asked whether the church has insurance.

Here's the new church compliance checklist, in the order the work actually arrives. Nothing on it requires a lawyer for a straightforward church plant. A few items do, and those are marked. Once the first year is behind you, it settles into the annual compliance calendar.

Block one: organize the corporation (first 30 days)

The state filing created a legal shell. This block puts a working church inside it.

Hold the organizational meeting. Adopt the bylaws, elect officers, authorize the bank account, adopt a conflict-of-interest policy, and record all of it. This is one meeting, and it's the single highest-value hour of the first year. Your church's first board meeting walks the agenda.

Write the minutes properly. Named movers, named seconders, vote counts, signature, date. Organizational minutes: what the first meeting must record covers exactly what belongs in them.

Seat a real board. Three unrelated directors is the practical floor. A board of one is a governance problem waiting for a bad month, and it makes several of the items below impossible to do cleanly.

Start the corporate records book. Articles, bylaws, organizational minutes, EIN letter, every subsequent set of minutes. One binder, one scanned copy stored away from the building.

Get the EIN. Free, direct from the IRS, and it takes minutes (IRS, Get an Employer Identification Number). Never pay a service for it.

Register with the state for anything the state requires. Charitable solicitation registration and annual report requirements vary widely. Check your own secretary of state and attorney general pages. This is the item most often missed, because nobody tells you.

Block two: set up the money (first 60 days)

Open the bank account in the church's name. Bring the articles, the EIN letter, and the organizational minutes with the account resolution in them. Never run church money through a personal account, not even for a week. Untangling that later is genuinely painful.

Set two-person financial controls before there is money to control. The classic minimum: the person who opens the mail isn't the person who records the deposit, two signatures over a set threshold, and a board member other than the treasurer reviews the statements each month. Small churches resist this because it feels like distrust. It's the opposite. Controls protect the treasurer, who is usually a volunteer and the only person who would ever be suspected.

Decide how you receipt donors. Contemporaneous written acknowledgment with the required language, a system for logging gifts, and a plan for the January year-end statement (IRS Publication 1771, Charitable Contributions). Get this right in month two and January is a non-event.

Adopt a benevolence policy before the first request arrives. Every church gets asked for help. Deciding the criteria while nobody specific is asking is far easier than deciding after.

Choose an accounting method and a bookkeeping system. Almost any system works. No system doesn't.

Block three: set up the people (first 90 days)

Decide compensation in advance, in a board vote. Any pay to the pastor, including a housing allowance, is a board decision recorded in the minutes before the pay is earned. A housing allowance in particular only applies to compensation earned after the designation (IRS, Ministers' Compensation & Housing Allowance). It's never applied backwards, so a new church should get it on the record at the first meeting where compensation is set.

Classify workers correctly. The worship leader who is at every service on your schedule using your equipment is very likely an employee, whatever the church calls them (IRS, Independent contractor or employee). Getting this wrong is expensive to unwind and is one of the more common findings against small churches.

Adopt a child safety policy before children's ministry starts. Two-adult rule, screening, check-in and check-out, a reporting path. This isn't a year-two item. Insurers ask about it, and the first Sunday you run kids' programming is the first Sunday it matters.

Get insurance in place. General liability at minimum, plus directors and officers, plus a hard look at abuse coverage. Ask the broker specific questions rather than accepting a package summary.

Adopt the core policies as a set. Conflict of interest, benevolence, child safety, financial controls, record retention. Five documents, five board votes, one afternoon.

Block four: the annual rhythm (by month twelve)

The exemption question. A church that meets the requirements is generally treated as tax-exempt without filing an application, and churches are generally not required to file the annual Form 990 series (IRS Publication 1828, Tax Guide for Churches). Many new churches still apply for a determination letter anyway, because grant-makers, some banks, some landlords and some donors ask to see one. Whether it's worth the filing fee and the work is a genuine judgment call for your situation, and it's a reasonable question to put to a CPA or an attorney who does this work.

Put the board calendar on paper. A fixed annual meeting, a budget meeting, a compensation meeting held before the year starts, an insurance review, and a policy review. Churches that never have a governance crisis are almost always churches with a boring calendar.

Check your state annual report. Most states require one. Missing it can put the corporation in bad standing, which is embarrassing at exactly the wrong moment, usually a property purchase or a loan.

Review the bylaws once, after a year of actually using them. You'll have found the clauses that don't match how the church really works. Amend them properly, at a meeting, on the record.

A worked first-year calendar

Here's what this looks like for a church that files articles in February.

Notice how little of that is legal work and how much of it is calendar work.

How new churches get this wrong

Everything waits for the pastor. One person is chasing the bank, the insurance, the bookkeeping and the policies while also preaching every week. Nothing gets finished. Assign each block to a named person at the organizational meeting.

Policies are downloaded but never adopted. A folder of documents nobody voted on isn't a policy set. Adoption at a meeting, recorded in the minutes, is what makes them real.

Compensation decided casually. "We'll pay you what we can" turns into an undocumented arrangement that's difficult to correct and awkward to explain. Vote it, record it, revisit it annually.

Money moving before the account exists. Gifts deposited personally with the intention of sorting it out later. Sort it out first.

The records live in one person's email. When that person moves away, the church's memory goes with them.

When you actually need a lawyer

Most of this list is self-serviceable. These aren't:

• The church is separating from a denomination, or there is any question about who owns the property or the name.
• Real estate is being purchased, donated or transferred into the church.
• The founding group is already in conflict about authority or doctrine. Bylaws written during a fight will be read during the next one.
• The church is taking on employees in a complicated arrangement, or inheriting staff from a predecessor entity.
• Anyone is threatening litigation, or an allegation involving a minor has been made. Those go to counsel and, where required, to the authorities. Not to a template.

Common questions

Do we have to apply for 501(c)(3) status?

A church that meets the requirements is generally treated as exempt without applying (IRS, Exemption requirements for 501(c)(3) organizations). The practical reasons churches apply anyway are third parties: grant applications, some banks, some landlords and donors who want to see a determination letter. It's a business decision more than a legal obligation, and worth a conversation with a CPA who works with churches.

How much of this can wait until year two?

Insurance, child safety, financial controls and compensation decisions can't wait. Each of them protects against something that can happen this month. The bylaws review, the determination letter question and refinements to the board calendar reasonably can.

We're three people meeting in a living room. Is this overkill?

No, but it scales. A house church needs the corporation organized, the money separated, the compensation decided in advance and the records kept. It doesn't need a twelve-person board or an employee handbook. Do the blocks; size them to the church you actually are.

What if we've already missed things?

Nearly everything here can be caught up in one well-run board meeting. Ratify what was actually done, adopt what was never adopted, and date it today rather than backdating it. Then set the calendar so it doesn't repeat. The full first-year sequence is laid out on the church formation hub.

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Everything on this list, in one place. The Start My Church Kit is the full startup sequence: bylaws, organizational minutes and resolutions, the officer and member structure, the conflict-of-interest policy and the first-year guide. The checklist above becomes documents you fill in rather than research you have to do. $149, instant download.

*Faith Docs provides self-help document templates, not legal advice. We are not a law firm. For representation, consult a licensed attorney.*