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Question:
When you might not want to apply for nonprofit and tax-exempt status How do you show proof for funders and others who might require proof of your exempt status.
Answer:

Hi Shelley.
The quick answer is "You can't!"
In order to be exempt, you must have IRS certification that you are a tax-exempt organization under section 501(c)(3) of the internal revenue code (Assuming that your organization is located or based in the United States).  In order to obtain that certification, you must apply and be approved by the IRS,
While some people might just want to give you donations because they care about what your organization does, most people want to be able to take a tax deduction for their charitable giving, and all foundations require IRS certification.  You are required to give individual donors a letter confirming the amount of their donation, the date(s) of their donation, and your organizaton's 501(c)(3) number.  You are required to keep records of all donations received and to make reports annually to the IRS.  
Pretending to be exempt or asserting that you are when you really aren't can get you in a LOT of trouble with the IRS and with donors.

Question Date: Mon, 09/08/2014