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How Does Chariot Assess a Nonprofit’s Eligibility?

Nonprofit Compliance at Chariot

Sarah Sassoon avatar
Written by Sarah Sassoon
Updated over 3 months ago

Nonprofit compliance is a top priority at Chariot. Our goal is to ensure every organization using our products is a legitimate, 501(c)(3) public charity in good-standing. This helps protect donors, nonprofits, and grantmakers. Below is an overview of the steps Chariot follows to verify a nonprofit’s eligibility.

Chariot’s Compliance Process

In order to be eligible to receive a gift, an organization must currently be listed in both the IRS Business Master File (“IRS BMF”) and IRS Publication 78 (“Pub 78”), which are IRS lists of organizations eligible to receive tax-deductible charitable contributions.

IRS Foundation Code Check

Chariot verifies a nonprofit’s foundation code from the IRS BMF. Some foundation codes may be ineligible for Chariot Processing, Disbursements, or DAFpay.

IRS Pub 78 Verification

Chariot also checks whether a nonprofit is listed in the Pub 78 database of qualified charities.

Even if an organization is eligible to receive tax-deductible charitable contributions, it might not be listed in Pub 78 if it is a:

  • Church or Religious Organization

    • Churches, synagogues, mosques, and other religious organizations are automatically tax-exempt and not required to register with the IRS or file Form 990s — so they may not appear in Pub 78.

  • Governmental Unit

    • Public schools, municipalities, and other government entities that qualify under IRC §170(b)(1)(A)(v) are eligible to receive donations but usually aren’t listed.

  • Subordinate Organization

    • If a nonprofit is under a group exemption (like a local chapter of a national nonprofit or a member of a larger religious denomination), they may not have their own individual listing in Pub 78.

  • New 501(c)(3)

    • Pub 78 updates its data monthly, so recently approved nonprofits may not yet be added to the list.

  • Recently Reinstated Nonprofit

    • If a nonprofit’s tax-exempt status was revoked and recently reinstated, there may be a lag before its reappearance in Pub 78.

OFAC Watchlist Screening

Chariot screens a nonprofit against the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) list of sanctioned entities.

Additional Screening

In addition to the above, Chariot may request other information and conduct additional onboarding checks to ensure nonprofit legitimacy and compliance.

Monitoring

Chariot continuously monitors all relevant databases and watchlists to ensure nonprofits maintain ongoing compliance and good standing.

If an organization’s status changes, our compliance team is alerted and may contact the nonprofit for resolution.

Questions?

If you have questions about your eligibility or need help updating your records, please email our compliance team and include your EIN and organization name in the subject line.

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