For donors, confirming 501(c)(3) status before giving ensures your donation is tax-deductible. The IRS only allows deductions for contributions to organisations that hold current 501(c)(3) status — and that status can be revoked if an organisation fails to file required returns for three consecutive years. Approximately 275,000 organisations lost their tax-exempt status in 2011 alone when the IRS began automatic revocation for non-filers.
For grant-makers and foundations, EIN verification is a baseline due diligence step. Most private foundations and corporate giving programmes require valid 501(c)(3) status as a minimum eligibility criterion. Without it, grants to an organisation may not count as "qualifying distributions" under IRS rules — creating tax liability for the foundation.
EINs are also used throughout the grant application process: on IRS Form W-9, on federal grant applications through Grants.gov, and on fiscal sponsorship agreements. Having your EIN correct and your status current is essential infrastructure for any nonprofit seeking funding.