How does anyone know when an organization claiming to be a non-profit entity really is? There are an ever-increasing number of groups who set out to do good in their communities. There, however, are an increasing number of instances reported about in which shoddy record-keeping or no record-keeping has resulted in mis-use of funds intended for community do-good intentions.
To help consumers identify the legitimate non-profit operations, the IRS and the Commonwealth of Pennsylvania encourage consumers to do the diligence before making contributions. Both the IRS and the Commonwealth of Pennsylvania have guidelines for groups contemplating non-profit status.
In addition, you may verify an organization’s tax-exempt status and eligibility to receive tax-deductible charitable contributions by asking to see an organization’s IRS letter recognizing it as tax-exempt. You may also confirm an organization’s status by calling the IRS (toll-free) at 1-877-829-5500.
Here is guidance on establishment of a non-profit organization from the IRS:
Life Cycle of an Exempt Organization
Organizations that meet the requirements of Internal Revenue Code section 501(a) are exempt from federal income taxation. In addition, charitable contributions made to some section 501(a) organizations by individuals and corporations are deductible under Code section 170.
This website provides information about points of intersection between organizations and the IRS. The content includes explanatory information, and links to forms that an organization may need to file with the IRS. The materials cover five stages in an organization’s life cycle:
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Starting Out: Creating an organization under state law, acquiring an employer identification number, and identifying the appropriate federal tax classification.
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Applying for Exemption: Acquiring, completing, and submitting application forms; how the IRS processes applications; and getting help from the IRS during the application process.
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Required Filings: Annual exempt organization returns, unrelated business income tax filings, and other returns and reports that an organization may have to file.
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Ongoing Compliance: How an organization can avoid jeopardizing its tax-exempt status, disclosure requirements, employment taxes, and other ongoing compliance issues.
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Significant Events: Audits, private letter rulings, and termination procedures.
Columbia news, views & reviews 
A front-page article in the Lancaster Sunday News (July 3, 2011) adds information to this posting. (http://lancasteronline.com/article/local/415281_IRS-cleans-up-nonprofit-list.html)
This July 4 Intelligencer Journal/New Era column (http://lancasteronline.com/article/local/415657_Nonprofits-lose-exempt-status-for-failing-to-file-returns.html) identifies more reasons to know which organizations are truly non-profit:
“Tax-exempt status is important for multiple reasons. Contributions by donors will not be tax deductible if the organization is not tax-exempt. The organization does not qualify for an exemption from the sales tax if the status is not currently tax-exempt. The organization must file a corporate tax return and pay income tax if it is not tax-exempt.
“To find out if a nonprofit is on the list, go to http://www.irs.gov/charities. OpenData also provides on its website a searchable combined list. Go to opendata.socrata.com.
“Failing to comply with annual reporting obligations is not the only way to lose your tax-exempt status. A nonprofit may not provide private benefit to any officers, directors or employees. This is the prohibition against ‘private inurement.'”