A 501(c)(3) organization is a United States corporation, trust,
unincorporated association Unincorporated associations are one vehicle for people to cooperate towards a common goal. The range of possible unincorporated associations is nearly limitless, but typical examples are: :* An amateur football team who agree to hire a pitch onc ...
or other type of organization exempt from federal income tax under section 501(c)(3) of Title 26 of the
United States Code In the law of the United States, the Code of Laws of the United States of America (variously abbreviated to Code of Laws of the United States, United States Code, U.S. Code, U.S.C., or USC) is the official compilation and codification of the ...
. It is one of the 29 types of
501(c) A 501(c) organization is a nonprofit organization in the federal law of the United States according to Internal Revenue Code (26 U.S.C. § 501(c)) and is one of over 29 types of nonprofit organizations exempt from some federal income taxe ...
nonprofit organization A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
s in the US. 501(c)(3) tax-exemptions apply to entities that are organized and operated exclusively for
religious Religion is usually defined as a social- cultural system of designated behaviors and practices, morals, beliefs, worldviews, texts, sanctified places, prophecies, ethics, or organizations, that generally relates humanity to supernatura ...
, charitable,
scientific Science is a systematic endeavor that builds and organizes knowledge in the form of testable explanations and predictions about the universe. Science may be as old as the human species, and some of the earliest archeological evidence ...
literary Literature is any collection of written work, but it is also used more narrowly for writings specifically considered to be an art form, especially prose fiction, drama, and poetry. In recent centuries, the definition has expanded to include ...
or educational purposes, for testing for public safety, to foster national or international
amateur sports Amateur sports are sports in which participants engage largely or entirely without remuneration. The distinction is made between amateur sporting participants and professional sporting participants, who are paid for the time they spend competing ...
competition, or for the prevention of cruelty to children or
animals Animals are multicellular, eukaryotic organisms in the biological kingdom Animalia. With few exceptions, animals consume organic material, breathe oxygen, are able to move, can reproduce sexually, and go through an ontogenetic stage ...
. 501(c)(3) exemption applies also for any non-incorporated community chest, fund, cooperating association or foundation organized and operated exclusively for those purposes.IRS Publication 557 "Tax-Exempt Status For Your Organization", Page 19, (Rev. June 2008), Cat. No 46573C.
Retrieved March 9, 2009.
There are also supporting organizations—often referred to in shorthand form as "Friends of" organizations. 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 Matching funds are funds that are set to be paid in proportion to funds available from other sources. Matching fund payments usually arise in situations of charity or public good. The terms cost sharing, in-kind, and matching can be used inter ...
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.


The two exempt classifications of 501(c)(3) organizations are as follows: * A
public charity A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being (e.g. educational, religious or other activities serving the public interest or common good). The legal definition of a cha ...
, identified by the
Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ...
(IRS) as "not a private foundation", normally receives a substantial part of its income, directly or indirectly, from the general public or from the government. The public support must be fairly broad, not limited to a few individuals or families. Public charities are defined in the
Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 ...
under sections 509(a)(0) through 509(a)(4). * A
private foundation A private foundation is a tax-exempt organization not relying on broad public support and generally claiming to serve humanitarian purposes. The Bill & Melinda Gates Foundation is the largest private foundation in the U.S. with over $38 billion i ...
, sometimes called a non-operating foundation, receives most of its income from investments and endowments. This income is used to make grants to other organizations, rather than being disbursed directly for charitable activities. Private foundations are defined in the Internal Revenue Code under section 509(a) as 501(c)(3) organizations, which do not qualify as public charities.

Obtaining status

The basic requirement of obtaining tax-exempt status is that the organization is specifically limited in powers to purposes that the IRS classifies as tax-exempt purposes. Unlike for-profit corporations that benefit from broad and general purposes, non-profit organizations need to be limited in powers to function with tax-exempt status, but a non-profit corporation is by default not limited in powers until it specifically limits itself in the articles of incorporation or nonprofit corporate bylaws. This limiting of the powers is crucial to obtaining tax exempt status with the IRS and then on the state level. Organizations acquire 501(c)(3) tax exemption by filing IRS
Form 1023 Form 1023 is a United States IRS tax form, also known as the Application for Recognition of Exemption Under 501(c)(3) of the Internal Revenue Code. It is filed by nonprofits to get exemption status. On January 31st of 2020, the IRS abandoned the p ...
.Phillips, Marlissa J.
tax zone: Nonprofit Not Tax Exempt?
''The Atlanta Tribune''. December 2002. p. 64.
, the form must be accompanied by an $850 filing fee if the yearly gross receipts for the organization are expected to average $10,000 or more.IR
"Form 1023"
(Rev. 6-2006), p. 12.
IRS Exempt Organizations Website
Retrieved on September 7, 2009.
If yearly gross receipts are expected to average less than $10,000, the filing fee is reduced to $400. There are some classes of organizations that automatically are treated as tax exempt under 501(c)(3), without the need to file Form 1023: * Churches, their integrated auxiliaries, and conventions or associations of churches. A convention or association of churches generally refers to the organizational structure of congregational churches. A convention or association of churches can also refer to a cooperative undertaking of churches of various denominations that works together to perform religious activities. * Organizations that are not private foundations and that have gross receipts that normally are not more than $5,000 The IRS released a software tool called Cyber Assistant in 2013, which was succeeded by Form 1023-EZ in 2014. There is an alternative way for an organization to obtain status if an organization has applied for a determination and either there is an actual controversy regarding a determination or the Internal Revenue Service has failed to make a determination. In these cases, the
United States Tax Court The United States Tax Court (in case citations, T.C.) is a federal trial court of record established by Congress under Article I of the U.S. Constitution, section 8 of which provides (in part) that the Congress has the power to "constitute ...
, the
United States District Court for the District of Columbia The United States District Court for the District of Columbia (in case citations, D.D.C.) is a federal district court in the District of Columbia. It also occasionally handles (jointly with the United States District Court for the District ...
, and the
United States Court of Federal Claims The United States Court of Federal Claims (in case citations, Fed. Cl. or C.F.C.) is a United States federal court that hears monetary claims against the U.S. government. It was established by statute in 1982 as the United States Claims Court ...
concurrent jurisdiction Concurrent jurisdiction exists where two or more courts from different systems simultaneously have jurisdiction over a specific case. This situation leads to forum shopping, as parties will try to have their civil or criminal case heard in t ...
to issue a declaratory judgment of the organization's qualification if the organization has exhausted administrative remedies with the Internal Revenue Service. Prior to October 9, 1969, nonprofit organizations could declare themselves to be tax-exempt under Section 501(c)(3) without first obtaining Internal Revenue Service recognition by filing Form 1023 and receiving a determination letter. A nonprofit organization that did so prior to that date could still be subject to challenge of its status by the Internal Revenue Service.

Tax-deductible charitable contributions

Individuals may take a tax deduction on a charitable gift to a 501(c)(3) organization that is organized and operated exclusively for religious, charitable, scientific, literary or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals. An individual may not take a tax deduction on gifts made to a 501(c)(3) organization that is organized and operated exclusively for the testing for public safety. In the case of tuition fees paid to a private 501(c)(3) school or a church school, the payments are not tax-deductible charitable contributions because they are payments for services rendered to the payee or the payee's children. The payments are not tax-deductible charitable contributions even if a significant portion of a church school's curriculum is religious education. For a payment to be a tax-deductible charitable contribution, it must be a voluntary transfer of money or other property with no expectation of procuring financial benefit equal to the transfer amount. Before donating to a 501(c)(3) organization, a donor can consult the searchable online IRS list of charitable organizations to verify that the organization qualifies to receive tax-deductible charitable contributions. Consumers may file IRS Form 13909, with documentation, to complain about inappropriate or fraudulent (i.e., fundraising, political campaigning, lobbying) activities by any 501(c)(3) organization. Most 501(c)(3) must disclose the names and addresses of certain large donors to the Internal Revenue Service on their annual returns, but this information is not required to be made available to the public, unless the organization is an independent foundation. Churches are generally exempt from this reporting requirement.


All 501(c)(3) organizations must make available for public inspection its application for tax-exemption, including its Form 1023 or Form 1023-EZ and any attachments, supporting documents, and follow-up correspondence with the Internal Revenue Service.Public Disclosure and Availability of Exempt Organizations Returns and Applications: Documents Subject to Public Disclosure
. ''Internal Revenue Service''. April 17, 2018.
The same public inspection requirement applies to the organization's annual return, namely its
Form 990 Form 990 (officially, the "Return of Organization Exempt From Income Tax") is a United States Internal Revenue Service form that provides the public with financial information about a nonprofit organization. It is often the only source of such i ...
, Form 990-EZ, Form 990-PF, Form 990-T, and Form 1065, including any attachments, supporting documents, and follow-up correspondence with the Internal Revenue Service, with the exception of the names and addresses of donors on Schedule B.Public Inspection and Disclosure of Form 990-T
. ''Internal Revenue Service''. April 2, 2018.
Annual returns must be made publicly available for a three-year period beginning with the due date of the return, including any extension of time for filing. The Internal Revenue Service provides information about specific 501(c)(3) organizations through its Tax Exempt Organization Search online. A private nonprofit organization,
GuideStar Candid is an information service specializing in reporting on U.S. nonprofit companies. In 2016, its database provided information on 2.5 million organizations.Wyland, Michael. "GuideStar Introduces Program Metrics Section for Nonprofit Profil ...
, provides information on 501(c)(3) organizations. ProPublica's Nonprofit Explorer provides copies of each organization's Form 990 and, for some organizations, audited financial statements. Open990 is a searchable database of information about organizations over time. WikiCharities, a nonprofit organization, is a growing global database that allows nonprofits and charities to be searchable by name, location, and topic. WikiCharities also gives each nonprofit a personalized webpage where nonprofits can improve transparency by listing updated contact information, leadership, board members, financials, annual reports, project activities, and more.

Limitations on political activity

Section 501(c)(3) organizations are prohibited from supporting political candidates, as a result of the Johnson Amendment enacted in 1954. Section 501(c)(3) organizations are subject to limits on
lobbying In politics, lobbying, persuasion or interest representation is the act of lawfully attempting to influence the actions, policies, or decisions of government officials, most often legislators or members of regulatory agencies. Lobbying, wh ...
, having a choice between two sets of rules establishing an upper bound for their lobbying activities. Section 501(c)(3) organizations risk loss of their tax-exempt status if these rules are violated. An organization that loses its 501(c)(3) status due to being engaged in political activities cannot subsequently qualify for 501(c)(3) status.


Churches must meet specific requirements to obtain and maintain tax-exempt status; these are outlined in "IRS Publication 1828: Tax Guide for Churches and Religious Organizations". This guide outlines activities allowed and not allowed by churches under the 501(c)(3) designation. In 1980, the
United States District Court for the District of Columbia The United States District Court for the District of Columbia (in case citations, D.D.C.) is a federal district court in the District of Columbia. It also occasionally handles (jointly with the United States District Court for the District ...
recognized a 14-part test in determining whether a religious organization is considered a church for the purposes of the Internal Revenue Code: Having an established congregation served by an organized ministry is of central importance.Spiritual Outreach Society v. Commissioner
. 927 F.2d 335 (8th Cir. 1991).
Points 4, 6, 8, 11, 12, and 13 are also especially important. Nevertheless, the 14-point list is a guideline; it is not intended to be all-encompassing, and other relevant facts and circumstances may be factors. Although there is no definitive definition of a church for Internal Revenue Code purposes, in 1986 the
United States Tax Court The United States Tax Court (in case citations, T.C.) is a federal trial court of record established by Congress under Article I of the U.S. Constitution, section 8 of which provides (in part) that the Congress has the power to "constitute ...
said that "A church is a coherent group of individuals and families that join together to accomplish the religious purposes of mutually held beliefs. In other words, a church's principal means of accomplishing its religious purposes must be to assemble regularly a group of individuals related by common worship and faith."Louthian, Robert; Miller, Thomas (1994).
Defining "Church" - The Concept of a Congregation
. ''Exempt Organization Continuing Professional Education Text''. Internal Revenue Service. 1994.
The United States Tax Court has stated that, while a church can certainly broadcast its religious services by radio, radio broadcasts themselves do not constitute a congregation unless there is a group of people physically attending those religious services. A church can conduct worship services in various specific locations rather than in one official location.Private Letter Ruling 200530028
. ''Internal Revenue Service''. May 3, 2005.
A church may have a significant number of people associate themselves with the church on a regular basis, even if the church does not have a traditional established list of individual members. In order to qualify as a tax-exempt church, church activities must be a significant part of the organization's operations. An organization whose operations include a substantial nonexempt commercial purposes, such as operating restaurants and grocery stores in a manner consistent with a particular religion's religious beliefs does not qualify as a tax-exempt church.

Political campaign activities

Organizations described in section 501(c)(3) are prohibited from conducting
political campaign A political campaign is an organized effort which seeks to influence the decision making progress within a specific group. In democracies, political campaigns often refer to electoral campaigns, by which representatives are chosen or referen ...
activities to intervene in
election An election is a formal group decision-making process by which a population chooses an individual or multiple individuals to hold public office. Elections have been the usual mechanism by which modern representative democracy has operat ...
s to public office. The Internal Revenue Service website elaborates on this prohibition:


Since section 501(c)(3)'s political-activity prohibition was enacted, "commentators and litigants have challenged the provision on numerous constitutional grounds," such as
freedom of speech Freedom of speech is a principle that supports the freedom of an individual or a community to articulate their opinions and ideas without fear of retaliation, censorship, or legal sanction. The right to freedom of expression has been recog ...
vagueness In linguistics and philosophy, a vague predicate is one which gives rise to borderline cases. For example, the English adjective "tall" is vague since it is not clearly true or false for someone of middling height. By contrast, the word "prime" i ...
, and
equal protection The Equal Protection Clause is part of the first section of the Fourteenth Amendment to the United States Constitution. The clause, which took effect in 1868, provides "''nor shall any State ... deny to any person within its jurisdiction the equal ...
and selective prosecution.Joseph S. Klapach, Note
Thou Shalt Not Politic: A Principled Approach to Section 501 (C)(3)'s Prohibition of Political Campaign Activity
84 Cornell L. Rev. 504 (1999).
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
decisions, such as '' Regan v. Taxation with Representation of Washington'', suggested that the Court, if it were to squarely examine the political-activity prohibition of § 501(c)(3), would uphold it against a constitutional challenge. However, some have suggested that a successful challenge to the political activities prohibition of Section 501(c)(3) might be more plausible in light of '' Citizens United v. FEC''.


In contrast to the prohibition on political campaign interventions by all section 501(c)(3) organizations, public charities (but not private foundations) may conduct a limited amount of
lobbying In politics, lobbying, persuasion or interest representation is the act of lawfully attempting to influence the actions, policies, or decisions of government officials, most often legislators or members of regulatory agencies. Lobbying, wh ...
to influence legislation. Although the law states that "no substantial part" of a public charity's activities can go to lobbying, charities with large budgets may lawfully expend a million dollars (under the "expenditure" test) or more (under the "substantial part" test) per year on lobbying. The Internal Revenue Service has never defined the term "substantial part" with respect to lobbying. To establish a safe harbor for the "substantial part" test, the United States Congress enacted §501(h), called the Conable election after its author,
Representative Representative may refer to: Politics *Representative democracy, type of democracy in which elected officials represent a group of people *House of Representatives, legislative body in various countries or sub-national entities *Legislator, someon ...
Barber Conable. The section establishes limits based on operating budget that a charity can use to determine if it meets the substantial test. This changes the prohibition against direct intervention in partisan contests only for lobbying. The organization is now presumed in compliance with the substantiality test if they work within the limits. The Conable election requires a charity to file a declaration with the IRS and file a functional distribution of funds spreadsheet with their Form 990. IRS form 5768 is required to make the Conable election.

Foreign activities

A 501(c)(3) organization is allowed to conduct some or all of its charitable activities outside the United States.Rev. Rul. 71–460, 1971–2 C.B. 231
. ''Internal Revenue Service''. 1971.
Domestic Organizations with Foreign Operations
. ''Exempt Organization Continuing Professional Education Text''. Internal Revenue Service. 1983.
A 501(c)(3) organization is allowed to award grants to foreign charitable organizations if the grants are intended for charitable purposes and the grant funds are subject to the 501(c)(3) organization's control.Rev. Rul. 63–252, 1963–2 C.B. 101
. ''Internal Revenue Service'' via Bradford Tax Institute. 1963.
Additional procedures are required of 501(c)(3) organizations that are
private foundation A private foundation is a tax-exempt organization not relying on broad public support and generally claiming to serve humanitarian purposes. The Bill & Melinda Gates Foundation is the largest private foundation in the U.S. with over $38 billion i ...

Allowance of tax-deduction by donors

Donors' contributions to a 501(c)(3) organization are tax-deductible only if the contribution is for the use of the 501(c)(3) organization, and that the 501(c)(3) organization is not merely serving as an agent or conduit of a foreign charitable organization. The 501(c)(3) organization's management should review the grant application from the foreign organization, decide whether to award the grant based on the intended use of the funds, and require continuous oversight based on the use of funds. If the donor imposes a restriction or earmark that the contribution must be used for foreign activities, then the contribution is deemed to be for the foreign organization rather than the 501(c)(3) organization, and the contribution is not tax-deductible. The purpose of the grant to the foreign organization cannot include endorsing or opposing political candidates for elected office in any country.

Foreign subsidiaries

If a 501(c)(3) organization sets up and controls a foreign subsidiary to facilitate charitable work in a foreign country, then donors' contributions to the 501(c)(3) organization are tax-deductible even if intended to fund the foreign charitable activities.Public Letter Ruling 201438032
. ''Internal Revenue Service''. September 19, 2014.
If a foreign organization sets up a 501(c)(3) organization for the sole purpose of raising funds for the foreign organization, and the 501(c)(3) organization sends substantially all contributions to the foreign organization, then donors' contributions to the 501(c)(3) organization are not tax-deductible to the donors.


External links

Tax Exempt Organization Search
''Internal Revenue Service''. {{Authority control 0501c Non-profit organizations based in the United States Taxation in the United States Charity law