What is a 501(c)(3)?

Section 501(c)(3) is the portion of the US Internal Revenue Code that allows for federal tax exemption of nonprofit organizations, specifically those that are considered public charities, private foundations or private operating foundations. It is regulated and administered by the US Department of Treasury through the Internal Revenue Service. There are other 501(c) organizations, indicated by categories 501(c)(1) - 501(c)(28).

You may use the following links to view our IRS documentation:

 

Qualifying Entities

Entities that can seek 501(c)(3) determination from the IRS include corporations, trusts, community chests, LLCs1, and unincorporated associations. The overwhelming majority of 501(c)(3) organizations are nonprofit corporations.

Qualifying Purposes

In order to qualify for 501(c)(3) status, an entity must be organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals.

Provisions Unique to 501(c)(3)

One of the most distinct provisions unique to Section 501(c)(3) organizations as compared with other tax exempt entities is the tax deductibility of donations.  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) organizations2.

Other unique provisions tend to vary by state.  Like federal law, most states allow for deductibility for state income tax purposes.  Also, many states allow 501(c)(3) organizations to be exempt from sales tax on purchases, as well as exemption from property taxes.  Special nonprofit, bulk rate postage discounts are available from the Post Office to qualifying organizations.

Read more: What is a 501(c)3?
Under Creative Commons License: Attribution No Derivatives

Parkview Foundations does not provide tax advice. Should you have any questions about the deductibility of donations to the Parkview Foundations, please consult your tax advisor or accountant.