glossary: 501(c)(3)

501(c)(3): The section of the tax code that defines nonprofit, charitable, tax-exempt organizations. 501(c)(3) organizations are further defined as public charities, private operating foundations, and private non-operating foundations. See also: operating foundation; private foundation; public charity. (http://www.grantspace.org/)

"A 501(c)(3) nonprofit is exempt from federal income tax if it has these purposes: charitable, religious, educational, scientific, literary, testing for public safety, fosters amateur sports competition, prevents cruelty to children or animals." (http://nonprofit.about.com/)

"To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes…and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates." (http://www.irs.gov/)

"[An IRS] provision provides a deduction, for federal income tax purposes, for some donors who make charitable contributions to most types of 501(c)(3) organizations… Due to the tax deductions associated with donations, loss of 501(c)(3) status can be highly challenging to a charity's continued operation, as many foundations and corporate matching programs 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 the deduction." (http://www.wikipedia.org/)