5 Steps for Setting Up 501(c)(19) for Veterans' Nonprofits

Securing 501(c)(19) tax-exempt status is mandatory for nonprofits dedicated to serving U.S. Armed Forces personnel and veterans. This classification unlocks tax advantages and solidifies an organization's credibility and commitment to its noble cause. 

Our comprehensive guide delves into the nuances of 501(c)(19), eligibility requirements, and the application process, empowering organizations to navigate this critical designation effectively.

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Table of Contents

What is a 501(c)(19)?

Types of Organizations Exempt Under Section 501(c)(19)

What’s the Difference between 501(c)(3) and 501(c)(19)?

501(c)(19) Eligibility and Requirements

5 Steps to Start a 501(c)(19) Nonprofit Organization 

Summing Up on 501(c)(19) Tax Status

FAQs on 501(c)(19) Nonprofit Organizations

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What is a 501(c)(19)?

501(c)(19) is an IRS tax-exempt status for nonprofit organizations dedicated to supporting U.S. Armed Forces veterans and current members. These nonprofits focus on improving the lives of service members, veterans, and their families. 

They focus on past or present members through activities such as providing social and recreational opportunities, offering insurance benefits, and advocating for their welfare.

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Types of Organizations Exempt Under Section 501(c)(19)

To qualify for 501(c)(19) exemption, an organization must be one of the following:

• A post or organization of past or present U.S. Armed Forces members.
• An auxiliary unit or society of such a post or organization.
• A trust or foundation that benefits these posts or veterans organizations.

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These nonprofit organizations must engage in activities that:

• Support the welfare of veterans.
• Assist disabled war veterans and their dependents.
• Provide care and entertainment to hospitalized veterans or current service members.
• Preserve the memory of deceased veterans.
• Participate in patriotic events. 

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Examples of Organizations Operating as a 501(c)(19) Entity

• Veterans of Foreign Wars (VFW) of the United States:
  Their mission is to foster friendship and brotherhood among United States veterans of overseas conflicts. The organization aims to serve the war veterans and the military and advocate on their behalf.
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• Military Officers Association of America (MOAA):
  The organization focuses on military personnel matters, specifically legislation affecting the following:some text
  • Career force
  • Retired community
  • Veterans of the uniformed services
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• Veterans of Foreign Wars Auxiliary (Formerly the Ladies Auxiliary VFW):
  This organization’s goal is to honor the sacrifices of all uniformed personnel and serve the country's veterans.

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What’s the Difference between 501(c)(3) and 501(c)(19)?

501(c)(3) nonprofit organizations include public charities and private foundations. Contributions to 501(c)(3) nonprofit organizations are tax deductible. In many states, these nonprofit organizations are exempt from sales and property taxes.

Like 501(c)(3) organizations, donors and supporters of 501(c)(19) veterans’ organizations can deduct their charitable contributions on their federal income tax returns. Tax deductions are applicable only when at least 75% of the organization’s membership consists of veterans.

The distinction between these nonprofit organizations lies in the specific communities they both serve.

While some 501(c)(3) nonprofit organizations serve veterans, their goals are not limited to the welfare of the veterans’ community only. 501(c)(19) organizations solely work for the betterment of armed forces members and veterans.

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501(c)(19) Eligibility and Requirements

To be eligible for 501(c)(19) tax-exempt status, an organization must meet the following criteria:

• Be established in the United States or its possessions
• Have at least 75% of its members as past or present U.S. Armed Forces members, cadets, students of college ROTC programs or Armed Services academies, or their spouses, widows, widowers, relatives, or lineal descendants
• Limit its activities to those specified by the IRS, focusing on the betterment of veterans and service members
• Ensure that earnings do not benefit any private shareholder or individual

Auxiliary units, societies, trusts, or foundations associated with veterans' posts or organizations must adhere to additional requirements. Some of these requirements include:

• Being organized according to the bylaws of the parent organization.
• Having a specific membership composition of 75% veterans or spouses of veterans.
• Distributing income for charitable purposes.

A trust or foundation for a veterans’ post or organization can access tax-exempt status if:

• It is valid under local law and organized for charitable purposes
• It has a dissolution provision dictated in section 1.501(c)(3)-1(b)(4) of the Income Tax Regulations.
• Its corpus and income are used only to fund a veterans' post or organization’s charitable activities or as an insurance set aside.
• Its income is not accumulated unreasonably.
• A substantial portion of the auxiliary organization’s income is distributed to a veteran post or organization or for purposes intended forsome text
  • Religion
  • Charity
  • Science
  • Literature
  • Education
  • Prevention of cruelty to children or animal purposes

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5 Steps to Start a 501(c)(19) Nonprofit Organization 

Step 1: Create Your Organization

Step 2: File the Articles of Incorporation

Step 3: Acquire an Employer Identification Number (EIN)

Step 4: Complete Form 1024 to Apply for Tax-Exempt Status

Step 5: Maintain Your 501(c)(19) Status

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1. Create Your Organization

Establishing a 501(c)(19) organization begins by forming a board of directors consisting of individuals committed to serving veterans and current United States Armed Forces members. 

Develop a clear mission statement that outlines how your nonprofit will support these communities. Create bylaws that define your organization's structure, leadership roles, and decision-making processes. Ensure these bylaws align with IRS requirements for 501(c)(19) status.

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2. File the Articles of Incorporation

Articles of Incorporation are also known as certificates of incorporation or corporate charters. These are legal documents that must be filed with the Secretary of State in the state where your organization is based. 

These articles contain essential business information and officially register your nonprofit with the state. Each state has specific filing requirements, so research the regulations in your state to ensure you have all the necessary documentation before submitting your application.

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3. Acquire an Employer Identification Number (EIN)

Every business and organization must register for an EIN to identify your organization on several documents.

Apply for an EIN through the IRS’s online application. Ensure that the person applying should be your nonprofit's primary member or decision-maker.

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4. Complete Form 1024 to Apply for Tax-Exempt Status

To apply for 501(c)(19) tax-exempt status, you must complete IRS Form 1024. 

• Ensure that you select the correct version of Form 1024 for your 501(c)(19) organization and mark the box labeled "M" in Part I. 
• The form is 22 pages long and requires detailed information about your organization. 
• Carefully review the instructions before completing the form to ensure accuracy and faster processing. 
• Pay the required fee and submit your completed Form 1024 online through Pay.gov.

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5. Maintain Your 501(c)(19) Status

To maintain the tax-exempt status of your 501(c)(19) organization, ensure that you diligently complete the annual tax filing requirements. It shows that your organization is following all the best practices.

You’ll need to file Form 990 to file your tax returns annually. The form updates the IRS with your organization’s activities and finances throughout the year.

Form 990 should be available for everyone to see how your nonprofit operates. Check the financial status requirements to choose the right version of Form 990 for your organization.

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Case Study: How Commandery of St. Francis Raised $200,000 Using Zeffy’s Ticketing System

The Commandery of St. Francis, OSJ, a 501(c)(19) organization, hosted its 12th Annual Wounded Veterans' Polo Benefit in 2023. By using Zeffy, a 100% free ticketing system, the event raised an impressive $200,000 to support wounded veterans.

Zeffy's zero-fee model allowed the organization to save $10,000 in platform and transaction fees, ensuring that more funds directly benefited the veterans in need. This successful event exemplifies the power of dedicated nonprofits and the importance of choosing the right fundraising tools.

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Summing Up on 501(c)(19) Tax Status

Obtaining 501(c)(19) tax-exempt status is a significant milestone for nonprofit organizations dedicated to supporting United States Armed Forces veterans. 

By following the IRS requirements and application process, your nonprofit can gain access to valuable tax benefits. Establish your nonprofit as a trustworthy entity committed to serving the veteran community’s past or present members.

After securing your 501(c)(19) status, choose Zeffy, a 100% free fundraising platform designed for nonprofits. With Zeffy, you can focus on your mission of improving the lives of veterans and service members without worrying about any hidden charges.

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FAQs on 501(c)(19) Nonprofit Organizations

What are the benefits of a 501(c)(19)?

A 501(c)(19) organization is formed to offer benefits specifically to veterans and current United States Armed Forces members. These nonprofit organizations work toward improving the community's general well-being and support the widows and orphans of deceased members of the forces.

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Is a 501(c)(19) donation tax-deductible?

Yes, individual contributions to organizations with a 501(c)(19) status are eligible for tax deductions.

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What are the requirements for maintaining 501(c)(19) status?

To maintain 501(c)(19) status, at least 75% of the organization's members must be past or present members of the U.S. Armed Forces. Additionally, at least 97.5% of the total membership must consist of past or present members of the Armed Forces, cadets, and certain family members. 

The organization must also engage in activities that benefit its members, such as providing insurance benefits or sponsoring patriotic events.

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What activities can 501(c)(19) tax exempt organizations engage in?

These organizations can engage in a variety of activities, including:

• Providing social and recreational activities for veterans.
• Advocating for veterans' rights and benefits.
• Sponsoring or assisting with patriotic events.