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Charity TherapyAuthor: Jess Birken, MNM, JD
What if you could hang out with experienced nonprofit professionals and ask them your burning questions about the day-to-day life of nonprofits? What if you could take their wisdom and bring it back to your organization, for free? That's what we do on Charity Therapy. Hosted by Jess Birken - owner and lawyer at Birken Law Office. Every episode is an in-depth look at how to run a nonprofit, from fundraising to IRS woes to people problems and more! Our goal is to empower nonprofits to achieve your mission by doing things right. Language: en Genres: Business, Management, Non-Profit Contact email: Get it Feed URL: Get it iTunes ID: Get it Trailer: |
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162: No, Not the Tomatoes! | Are Nonprofit Startup Costs Tax-Deductible Donations for the Founder?
Episode 162
Thursday, 16 April, 2026
You scraped together your own money to start a brand-new nonprofit. You're out the money, but can you at least take a tax deduction? Meghan and I are back with a question from a new nonprofit founder who wants to know if the startup cash they put in before getting their 501c3 status counts as a tax-deductible donation. It's one of the most common questions we hear from new founders, and the answer involves a pretty handy IRS rule most people don't know about. Real Listener Question: "In June 2025, two friends and I created a housing placement nonprofit and each put our own money in to get it started. We earned our 501c3 status that September. Does that startup cash count as a tax-deductible donation even though it happened before our status was official?" Meghan and I break down the IRS backdating rule, the chicken-and-egg problem of nonprofit startup costs, and what founders need to know before they file their taxes. What You'll Learn: Why starting a nonprofit costs more than most founders expect The IRS backdating rule and how it protects early donors and founders What the 27-month window means for your tax-exempt status How founders can get reimbursed for the startup costs Why you can't take a deduction AND get reimbursed later Bottom line: Nonprofits are businesses, and businesses have startup costs. Know your options before you file, and don't double dip. Resources from this Episode Watch the C.H.U.D. trailer: https://youtu.be/iNq2yPGhv1w?si=-BIOh_iP-WCv_L0B Previous Episode: Why Recording In-Kind Donations Matters For Your Nonprofit: https://birkenlaw.com/charity-therapy-podcast/ct161-recording-inkind-donations Episode Transcript: https://birkenlaw.com/wp-content/uploads/2026/03/CT162_Transcript.pdf Connect with Us Jess Birken: https://www.linkedin.com/in/jessbirken/ Meghan Heitkamp: https://www.linkedin.com/in/meghan-heitkamp-829254115/ Listen & Engage Listen on Apple Podcasts | Spotify | YouTube | Amazon Music Rate & Review on Apple Podcasts: Click "Ratings and Reviews" then "Write a Review" Send us your nonprofit questions: https://birkenlaw.com/podcast/#podcast-story Stay Connected Sign up for the Birken Law Email list: https://birkenlaw.com/signup/ Follow us on Facebook, Instagram, Twitter
