The amount of time it takes to get approval for a 501(c)(3) tax-exempt listing varies considerably, depending on everything from human capital strain at the Internal Revenue Service to problems in the application.
The Cushing's Help Organization reports that the IRS gets 80,000 501(c)(3) applications a year, half of which don't make it through the process. The Foundation Group indicates that approval time can vary between 2 and 12 months or even longer if the case proves difficult to assign to a reviewer.
Expediting the Process
According to the Foundation Group, the IRS sometimes permits an expedited review process, if either the organization was formed as a response to urgent disaster-related issues or the organization needs approval to win a substantial grant that will expire within a specific time frame.
When to File
According to Cushing's Help Organization, an organization that plans to seek 501(c)(3) status should do so within about 15 months after forming before the IRS begins to look askance.
What Causes Delays?
The IRS cites 10 major issues that cause 501(c)(3) applications to be delayed, of which nine have to do with providing a sufficient and complete application. The top reason is an incorrect or missing user fee.