Nonprofit Management: Government Resources

What is 501(c)(3)?

501(c)(3) is a section of the Internal Revenue Code that designates an organization as charitable and tax-exempt. Organizations qualifying under this section include religious, educational, charitable, amateur athletic, scientific, or literary groups, organizations testing for public safety, or organizations involved in prevention of cruelty to children or animals. Most organizations seeking foundation or corporate contributions secure a Section 501(c)(3) classification from the Internal Revenue Service (IRS).

Note: The tax code sets forth a list of sections -- 501(c)(4-26) -- to identify other nonprofit organizations whose function is not solely charitable (e.g., professional or veterans organizations, chambers of commerce, fraternal societies, etc.).

Form 990 is an IRS public document that tax-exempt organizations with annual receipts of more than $100,000 or total assets more than $250,000 must file annually.
Form 990-EZ is an IRS form for organizations with annual receipts of less than $100,000 but at least $25,000 and total assets less than $250,000.

Most religious organizations are not required to file annual information returns, nor are organizations whose gross receipts are less than $25,000 per year. The majority of recognized charities fall into one of these two groups. All other organizations are required to file an annual information return: