What is a 501(c)(3) organization?

A 501(c)(3) organization is an organization that is organized and operated exclusively for tax-exempt purposes. Often referred to as charitable organizations, a 501(c)(3) organization must follow specific laws in order to retain its tax-exempt status.

One of the laws that govern this type of organization is the requirement that none of its earnings may benefit a private individual or shareholder. A 501(c)(3) organization must also not attempt to exert any large amount of influence over legislation or participate in any activity that campaigns for or against any specific political candidates. This type of organization is eligible to receive tax-deductible gifts and contributions.