501(c)(3)
501(c)(3) refers to a section of the U.S. federal income tax code. Organizations that have been granted 501(c)(3) status by the Internal Revenue Service may only conduct non-partisan activities. 501(c)(3) groups are sometimes referred to as "non-profits". This can be a source of confusion, since all U.S. states allow certain corporations to register as "not-for-profit" corporations. A corporation may be a not-for-profit corporation under the laws of the state in which it is incorporated, but not have federal 501(c)(3) status.
Donations to 501(c)(3) groups are tax deductible for the individual who makes the donation.
501(c)(3) organizations are not required to publicly disclose their donors. They may choose to do so, or the donor may choose to disclose that he or she provided a grant to a 501(c)(3) organization.
Some non-profit groups have two related corporations -- a 501(c)(3) and a 501(c)(4). Under IRS tax code, it is legal to transfer funds from a 501(c)(3) to a 501(c)(4), but the restrictions on how the money is spend carry over on any such transferred funds.
Campaign activity
Organizations exempt under section 501(c)(3) are prohibited from engaging in campaign activity. "Campaign activity" is not defined, but the IRS uses the following benchmarks for determining whether or not communications are considered "campaign activities":[1]
- Whether the communication identify a candidate for public office
- Does the communication express approval or disapproval for a candidate's position or actions?
- Whether the communication take place within close proximity to the election
- Whether the communication make reference to voting or an election
- Is the communication one in a series of communications that have been made by the charity when there is no election as well as during the election in question?
A communication mentioning an election runs the greatest risk of being considered campaign activity.
See also
External links
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