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501 Nonprofit Status

 

Comparison of 501(c)(3) and 501(c)(4), (6) and (7) Status

 

501(c)(3) 501(c)(4) 501(c)(6) 501(c)(7)
Organizational requirement No requirement (or less stringent) No requirement (or less stringent) No requirement (or less stringent)
Assets must be dedicated to charitable purposes No requirement to dedicate assets No requirement to dedicate assets No requirement to dedicate assets
Social activities must be insubstantial Social activity may be anything less than "primary" Social activity may be anything less than "primary" Social activity must be primary; other activities must be less than primary
Legislative activity must be insubstantial, or <20% if election made No limit on legislative activity as long as it furthers the exempt purpose No limit on legislative activity as long as it furthers the exempt purpose; legislative expenditures may limit the deductibility of dues No limit on legislative activity as long as it furthers the exempt purpose
Absolute prohibition against political activity Political activity permitted, but taxed Political activity permitted, but taxed Political activity permitted, but taxed
Must serve public purposes Can serve community purposes, can be somewhat narrower than (c)(3) Can serve the business purposes of the members Serves the social and recreation purposes of members
Donations are deductible as charitable contributions by donors on their tax returns Donations not deductible as charitable contributions - businesses sometimes deduct as advertising Donations not deductible as charitable contributions - businesses sometimes deduct as advertising; dues may be deductible as business expense Donations not deductible as charitable contributions
Eligible for low cost non-profit bulk mailing permit Not eligible for lowest bulk mail rates Not eligible for lowest bulk mail rates Not eligible for lowest bulk mail rates
Must take care to generate enough public support to avoid classification as a private foundation Not an issue under (c)(4) Not an issue under (c)(6) Not an issue under (c)(7)
Exempt from Federal income tax unless the organization has unrelated business income Exempt from Federal income tax unless the organization has unrelated business income Exempt from Federal income tax unless the organization has unrelated business income Exempt from Federal income tax on income derived from members; other income taxed



501 Nonprofit Status
(Required)
 

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