Can a new nonprofit get on a 2027 SGO list while its 501(c)(3) is pending?

The rule: a state may list you while you’re pending

Every 2027 SGO has to be a 501(c)(3) public charity on a participating state’s list. For a nonprofit formed this fall that creates a timing problem: the IRS takes weeks to months to recognize a new 501(c)(3), and most states close their 2027 application windows before then. Treasury solved it in the temporary regulations it issued on October 1, 2026 (T.D. 10057, § 1.25F-5T(d)(5)). A state’s list may include organizations whose exemption application is still pending with the IRS, if the state does all of the following:

1. It includes every pending applicant that seeks inclusion and meets the requirements. A state that takes one pending organization takes them all; it can’t pick favorites.
2. It certifies that the organization has applied for, but not yet received, IRS recognition as a 501(c)(3).
3. It certifies that the exemption, if granted, will be effective on or before January 1 of the list year.
4. Its list shows that the organization’s status is pending IRS recognition.
5. It has reviewed the organization’s governing documents and policies, which must expressly require the §25F operating rules, beyond a general promise to follow the law.

Once the IRS recognizes the exemption with an effective date on or before January 1 of the list year, it adds the organization to the IRS SGO list for that year as soon as the organization authorizes disclosure (§ 1.25F-5T(d)(9)(ii)).

The January 1, 2027 clock

The exemption has to be effective on or before January 1, 2027 for a 2027 list, and an exemption can only reach back as far as the day the organization was formed. So a new SGO aiming at 2027 has to be incorporated by January 1, 2027. Filing Form 1023 within 27 months after the end of the month you were formed generally makes the exemption effective from your formation date, so the application itself can still be pending when the year starts.

That is the outer limit. The binding one is your state’s deadline: 2027 lists are due to the IRS by February 15, 2027, and each state sets its own application cutoff before that. You have to be incorporated, have your bylaws and policies adopted, have filed Form 1023, and be registered to do business in the state before you can apply.

Which states take pending applicants

Whether a state accepts a pending applicant is the state’s choice, and states have answered differently. This table updates from our tracker of each state’s official process. “Accepted” means the state’s own form or page says so; “Not stated” means the state hasn’t said either way.

State fees are what that state charges an out-of-state nonprofit to register to do business, register as a charity where it requires one, and apply; each state’s page links to its fee schedule. They don’t include the IRS user fee for Form 1023 or the cost of incorporating in your home state.

What “pending” costs you

• You are not on the IRS SGO list yet. Under Treasury’s proposed regulations, which taxpayers may rely on for 2027 contributions, a donor generally may rely on the IRS SGO list at the time of the gift. Until the IRS recognizes your exemption and adds you, donors giving to you can’t point to that list.
• The word “pending” is printed next to your name on the state’s list, which careful donors and their tax preparers will notice.
• Denial unwinds everything. If the IRS never recognizes the exemption, the organization was never a 501(c)(3) and was never an SGO for that year.
• The full Form 1023 is slow. An SGO that expects more than $50,000 a year can’t use the short Form 1023-EZ. For the full form, the IRS says it decides 80% of applications within 191 days, and a state’s list deadline isn’t one of the reasons it accepts for expediting. A Form 1023 filed this fall will very likely still be pending when 2027 lists are due on February 15, and through the first months of 2027, when donors are most active.
• Fewer states. States that require the determination letter are closed to you until next year.

Sources: the IRS’s processing times for exemption applications, its user fees, and the Form 1023-EZ eligibility worksheet.

The other route: a nonprofit that already has its letter

An existing 501(c)(3) public charity already has its determination letter, so every state is open to it, including the ones that require the letter, and it can register to do business in another state the same way a new nonprofit would. What decides whether it can be an SGO is how much of its work is scholarships. Under Treasury’s proposed regulations, a single-state SGO whose activities are at least 85% scholarship granting runs the 90% spending test on its segregated §25F account alone; below 85%, at least 90% of all its gross receipts have to go to scholarships, which most organizations with other programs can’t meet. The full walkthrough is in Can your existing nonprofit become an SGO?

If you want more than one state

A multistate SGO, one on two or more states’ lists, has extra rules under Treasury’s proposed regulations: at least 85% of its activities must be scholarship granting (there is no fallback), it keeps a separate §25F account for each state, it lets donors choose which state their gift goes to, and it meets every operating rule separately for each state. It also has to be on each state’s list, which means meeting each state’s deadline and, for a pending applicant, finding states that accept pending applicants. A new organization built only for scholarships passes the 85% test by design.

What it costs

For a new nonprofit, the costs are your home state’s incorporation fee (commonly $25 to $125; Florida, for example, charges $70), the $600 IRS user fee for Form 1023, and each target state’s registration fees in the table above, plus your time or a lawyer’s for the bylaws and policies. An EIN is free. Many states also require charitable-solicitation registration before you ask anyone for money, and a brand-new organization usually files a budget in place of a financial history. The state-by-state apply pages list every fee with a link to the state’s own schedule.

The sequence, start to finish

1. Incorporate as a nonprofit corporation, with purposes limited to 501(c)(3) purposes. Do it now, and no later than January 1, 2027.
2. Get an EIN online the same day.
3. Adopt bylaws and written policies that expressly require each §25F operating rule, and hold the first board meeting.
4. File Form 1023 through Pay.gov.
5. Open the segregated §25F account (one per state if you plan to be multistate).
6. Register to do business in each target state, and register as a charity where the state requires it.
7. Apply on each state’s form before its deadline, as a pending applicant.

The free SGO Builder turns every step into a checklist, and How to start an SGO covers each one in depth.

Frequently asked questions