What is a 501(c)(3)?

501(C)(3) is an IRS designation identifying tax-exempt organizations. The name comes from the fact that this type of organization is defined under Section 501(c) of Title 26 of the U.S. Code.

Receiving 501(C)(3) status requires an organization to engage in charitable activities. 501(C)(3) is often used to refer to nonprofits as a whole, but not all nonprofit organizations receive 501(C)(3) status.

A Nonprofit with a 501(C)(3) designation or status identifies tax-exempt nonprofit organizations. Charitable organizations with 501(C)(3) status do not pay federal taxes, and individual donations are tax-deductible.

Advantages of being a 501(C)(3)The recognition of your organization as a 501(c)(3) tax-exempt entity by the Internal Revenue Service (IRS) offers many advantages in helping your organization receive donations and establish credibility.

Allows donors to receive a tax deduction (Incentivizing donations).
Grant funding eligibility for the nonprofitPotential tax exemption at both state and federal level.
Federal Unemployment Tax Exemption
Tax Exempt Financing options
Reduced Postal Rates

Tax Exempt, doesn’t always mean taxes don’t need to be paid!

501(C)(3) organizations are exempt from federal taxes, and donations are tax-deductible. However, the organization may still need to pay state and local taxes.

Here at BryteBridge, we can help you gain active exempt status with the IRS, guaranteed. We are one of the nation’s top 501(c)(3) service providers, helping over 35,000 nonprofits move forward successfully. In fact, we help close to 3% of nonprofits that get started each year in the United States.