An organization must have an EIN before it can apply for tax-exempt 501(c)3 status from the IRS. This nine-digit number functions similarly to a social security number for individuals. Even non-profits that do not expect to have employees must get an EIN.
In addition to being necessary for obtaining a 501(c)3, EINs are needed for:
- Hiring employees
- Opening bank accounts
- Changing the type of organization
- Taking over an existing non-profit
- Creating a trust
In other words, it pays for a non-profit to get an EIN from the IRS early on in existence. Fortunately, Form SS-4, the Application for Employer Identification Number, is short, straightforward, and free. Before they can receive an EIN, new businesses (including new non-profit organizations) need to state their: