501(c)(3) is the U.S. Internal Revenue Service designation for a nonprofit organization. While businesses either show a profit or suffer insolvency, a nonprofit organization has a particular public trust and responsibility not to engage in activities for the purpose of making a profit. IRS-designated nonprofit organizations are exempt from federal income taxes and therefore designated 501(c). The final number attached to their 501(c) designation describes the exact purpose of the organization. Charities are the most frequent 501(c)(3)s people encounter, disbursing funds to seek a disease cure or meet other needs. Land trusts, nonprofit hospitals, recreational or historical organizations, and some kinds of educational institutions also qualify for 501(c) status. For example, social service providers are usually designated 501(c)(4). Follow the steps below to determine whether an organization you wish to support with volunteer time or a financial contribution has 501(c)(3) status.
Determining 501(c)(3) status
Ask the organization and get information in print. A reputable 501(c)(3) organization is responsible for informing you of its tax-exempt status, along with its title, address and location. An organization claiming to be nonprofit but is actually in business to make money is committing fraud and should be reported to the IRS.
Contact your local IRS office and obtain forms needed to file a question about 501(c)(3) status. This is public information and can be obtained free of charge at the IRS link listed below or by following other procedures required by your local IRS office.
Feel free to ask further questions of the IRS or report confusing information or behavior by the organization for possible investigation. Obtaining and maintaining 501(c)(3) tax-exempt status requires many kinds of compliance with federal regulations designed to ensure public trust. Be as specific in your complaint as possible.
Janet Beal has written for various websites, covering a variety of topics, including gardening, home, child development and cultural issues. Her work has appeared on early childhood education and consumer education websites. She has a Bachelor of Arts in English from Harvard University and a Master of Science in early childhood education from the College of New Rochelle.