Refers to an organization that has applied for and obtained tax-exempt status from the IRS under Section 501(c)(3) of the Internal Revenue Code. To qualify for Section 501(c)(3) status, the organization must be formed for charitable, religious, educational, scientific, or literary purposes; for testing related to public safety; to foster national or international amateur sports competition; or for the prevention of cruelty to children or animals. An organization with 501(c)3 status does not pay income taxes related to its nonprofit purposes, can receive tax-deductible contributions from donors, and is eligible for private foundation grants.
Category: Nonprofits
Nolo’s Plain-English Law Dictionary. Gerald N. Hill, Kathleen Thompson Hill. 2009.