On a practical level, it is difficult to do business without incorporating. Banks are reluctant to open accounts without someone taking ultimate responsibility, which usually means the senior pastor. A church functioning as an unincorporated association normally places the pastor or one or more trustees at risk for all debts, contracts, and legal matters. When a church incorporates, it normally secures a non-profit status. The benefits of a non-profit distinction are many.
Federal statutes provide certain direct benefits to non-profit organizations.
A non-profit may apply and receive exemption from federal income taxes. A non-profit may receive a reduced postal rate. Exemption from state income taxes. Release from paying franchise taxes. Exemption from property taxes.