501(c)(3) organization

A 501(c)(3) organization is a United States corporation, trust, unincorporated association or other type of organization exempt from federal income tax under section 501(c)(3) of Title 26 of the United States Code. It is one of the 29 types of 501(c) nonprofit organizations^[1] in the US.

501(c)(3) tax-exemptions apply to entities that are organized and operated exclusively for religious, charitable, scientific, literary or educational purposes, for testing for public safety, to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals. 501(c)(3) exemption applies also for any non-incorporated community chest, fund, cooperating association or foundation organized and operated exclusively for those purposes.^[2]^[1] There are also supporting organizations—often referred to in shorthand form as "Friends of" organizations.^[3]^[4]^[5]^[6]^[7]

26 U.S.C. § 170 provides a deduction for federal income tax purposes, for some donors who make charitable contributions to most types of 501(c)(3) organizations, among others. Regulations specify which such deductions must be verifiable to be allowed (e.g., receipts for donations of $250 or more).

Due to the tax deductions associated with donations, loss of 501(c)(3) status can be highly challenging if not fatal to a charity's continued operation, as many foundations and corporate matching funds do not grant funds to a charity without such status, and individual donors often do not donate to such a charity due to the unavailability of tax deduction for contributions.^[8]

^ ^a ^b IRS Publication 557 "Tax-Exempt Status For Your Organization", Page 19, (Rev. June 2008), Cat. No 46573C., Retrieved March 9, 2009.
^ "Exempt Purposes – Internal Revenue Code Section 501(c)(3)". irs.gov.
^ Hopkins, Bruce R. (2011), The Law of Tax-Exempt Organizations (10 ed.), John Wiley and Sons, p. 879, ISBN 978-0-470-60217-1
^ Judith S. Ballan, "How To Aid a Foreign Charity Through an 'American Friends of' Organization", in Proceedings of the Twenty-Third New York University Conference on Tax Planning.
^ "Legal Dimensions of International Grantmaking: How a Private Foundation Can Use "Friends of" Organizations". Usig.org. Archived from the original on September 16, 2011. Retrieved June 7, 2011.
^ "Meet the expert: Suzanne M. Reisman, Law Offices of Suzanne M. Reisman". Giving Insights. March 3, 2010. Archived from the original on August 17, 2011. Retrieved June 7, 2011.
^ Larkin, Richard F.; DiTommaso, Marie (2011), Wiley Not-for-Profit GAAP 2011: Interpretation and Application of Generally Accepted Accounting Principles, John Wiley and Sons, p. Ch.11, ISBN 978-0-470-55445-6
^ "Donating to Charity". Retrieved October 9, 2021.

[:0-1] IRS Publication 557 "Tax-Exempt Status For Your Organization", Page 19, (Rev. June 2008), Cat. No 46573C., Retrieved March 9, 2009.

[2] "Exempt Purposes – Internal Revenue Code Section 501(c)(3)". irs.gov.

[Hopkins2011-3] Hopkins, Bruce R. (2011), The Law of Tax-Exempt Organizations (10 ed.), John Wiley and Sons, p. 879, ISBN 978-0-470-60217-1

[4] Judith S. Ballan, "How To Aid a Foreign Charity Through an 'American Friends of' Organization", in Proceedings of the Twenty-Third New York University Conference on Tax Planning.

[5] "Legal Dimensions of International Grantmaking: How a Private Foundation Can Use "Friends of" Organizations". Usig.org. Archived from the original on September 16, 2011. Retrieved June 7, 2011.

[6] "Meet the expert: Suzanne M. Reisman, Law Offices of Suzanne M. Reisman". Giving Insights. March 3, 2010. Archived from the original on August 17, 2011. Retrieved June 7, 2011.

[Larkin2011-7] Larkin, Richard F.; DiTommaso, Marie (2011), Wiley Not-for-Profit GAAP 2011: Interpretation and Application of Generally Accepted Accounting Principles, John Wiley and Sons, p. Ch.11, ISBN 978-0-470-55445-6

[8] "Donating to Charity". Retrieved October 9, 2021.

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