What is a 501(c)(4) Non Profit Organization?
With all of the attention paid to 501(c)(3) non-profit organizations, many have not ever heard of the numerous other 501(c) organizations that qualify for some form of federal tax exemption.
One prime example is the 501(c)(4)-- Civic Leagues and Social Welfare Organizations.
Curious about what makes it different? Here are a few notable features and characteristics of the 501(c)(4):
- The 501(c)(4) distinction was made exclusively for organizations that are non-profit and which promote social welfare.
- Applicable organizations must file IRS Form 1024 to apply for tax-exempt status.
- A 501(c)(4) organization's net earning must go toward charitable, education or recreational purposes.
- Examples of 501(c)4 include: civic associations, volunteer fire companies, local group promoting tenants' rights of tenants in the community
- 501(c)(4) organizations, unlike their 501(c)3 counterparts, can lobby, campaign, and otherwise participate in elections so long as the activities are in line with the organization's purpose and are not the primary activity for the organization.
- In applying for 501(c)(4) status, the applying organizations should be ready to show that it operates primarily to further common good and promote general welfare of the people in the community.
- An organization is not a 501(c)(4) if it limits use of its facilities to employees or certain private groups. A 501(c)(4) organization's earnings must not benefit a private shareholder or person.
Related Resources:
- 501(c)(4) -Civic Leagues and Social Welfare Organizations (IRS.gov)
- The difference between a 501(c)3 and a 501(c)4 (suite101.com)
- Business Entity Selection (provided by Barry K Rothman)
- Business Organizations (provided by Rubin, Glickman, Steinberg and Gifford PC)