Incorporating creates a new legal entity. So if you get your 501(c)(3) first and incorporate later - the newly incorporated organization is NOT a 501(c)(3). The status doesn't transfer. You'd have to file with the IRS (and pay the fee) again.

So explore incorporation. If that's a step you plan to pursue, do it before filing your 501(c)(3) application.

The reason for incorporating is primarily to reduce liability for you officers/directors. It changes the organization from a collection of individuals to an actual legal entity. So, say there was a contract dispute with a vendor. If the PTO is incorporated, he'd go after the corporation's assets and that's pretty much the end of the line. If not incorporated, he could sue the leaders of the organization and go after their personal assets.

Note - I'm not a lawyer and obviously law suits can get quite complicated. But this is the basic premise.

Hi! Our PTO started the "clean slate" process late last year. We bought the PTO Start-up Toolkit from PTO Today and it's awesome---It has walked us through much of the process thus far. But I do have the following question:

In the Toolkit, it says that it is not suggested that a PTO file for 501(c)3 status without incorporating first. Specifically, it says you can file without incorporating but it's not recommended. Does anyone know why? And what happens if we don't "incorporate" prior to filing?

Many thanks in advance to anyone who can shed some insight on this!