Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,748 reviews

Jump to Section

Need help with a 501c3 Application?

Post Project Now

What is a 501(c)(3) Organization?

A 501(c)(3) organization is a non-profit that falls within the category of religious, charity, or education. Organizations that are granted this designation are not allowed to participate in lobbying, but are exempt from paying taxes. Not all non-profit organizations are 501(c)(3) designated and most that are not do no have tax-exempt status.

Other designations for non-profit organizations include:

  • 501(c)(1), which applies to corporations organized ‘under act of congress’
  • 501(c)(2), which applies to title holding corporations for exempt organizations
  • 501(c)(4), which applies to civic leagues, social welfare organizations and local employee associations
  • 501(c)(5), which applies to labor, agricultural, and horticultural organizations
  • 501(c)(6), which applies to business leagues, chambers of commerce, and real estate boards, among others
  • 501(c)(7), which applies to social and recreational clubs
  • 501(c)(8), which applies to fraternal beneficiary societies and associations
  • 501(c)(9), which applies to voluntary employee beneficiary associations
  • 501(c)(10), which applies to domestic fraternal societies and associations
  • 501(c)(11), which applies to teachers’ retirement fund associations
  • 501(c)(12), which applies to benevolent life insurance associations, mutual ditch or irrigation companies, and mutual or cooperative telephone companies, among others
  • 501(c)(13), which applies to cemetery companies
  • 501(c)(14), which applies to state-chartered credit unions and mutual reserve funds
  • 501(c)(15), which applies to mutual insurance companies or associations
  • 501(c)(16), which applies to cooperative organizations to finance crop operations
  • 501(c)(17), which applies to supplemental unemployment benefit trusts
  • 501(c)(18), which applies to employee funded pension trusts created prior to June 25, 1959
  • 501(c)(19), which applies to post or organizations of past or present members of the armed forces
  • 501(c)(21), which applies to black lung benefit trusts
  • 501(c)(22), which applies to withdrawal liability payment funds
  • 501(c)(23), which applies to veterans’ organizations created prior to 1880
  • 501(c)(25), which applies to title holding corporations or trusts that have multiple parent corporations
  • 501(c)(26), which applies to state-sponsored organizations that provide health coverage to high-risk individuals
  • 501(c)(27), which applies to state-sponsored workers’ compensation reinsurance organizations
  • 501(c)(28), which applies to national railroad retirement investment trusts
  • 501(c)(29), which applies to cooperative health insurance issuers

While some of these are also tax exempt, many are considered non-profit organizations however they still are required to pay taxes like for-profit organizations.

Here is an article about different 501(c) organizations.

Who Qualifies for 501(c)(3) Status

A 501(c)(3) organization is a non-profit organization that is considered ‘charitable’ and generally public, though some private organizations can qualify. The categories for 501(c)(3) status include, but are not limited to:

  • Amateur sports
  • Charitable organizations
  • Educational
  • Literary
  • Prevention of cruelty
  • Public safety
  • Religious
  • Scientific

Organizations within these categories can apply for 501(c)(3) tax-exempt status and organizations outside of these are invited to apply as well. The IRS reviews applications to determine whether or not a specific organization meets the requirements to be classified under a specific designation and whether they are considered tax-exempt.

Here is an article about what qualifies for 501(c)(3) status.

Meet some lawyers on our platform

Gregory F.

2 projects on CC
View Profile

Christopher M.

10 projects on CC
View Profile

Michael M.

7 projects on CC
View Profile

John P.

7 projects on CC
View Profile

501(c)(3) Requirements

Not all organizations within these categories qualify, however. There are additional requirements that must be met including:

  • Organization must not praise or advocate for discrimination
  • Must provide a reason for tax exemption status
  • Must achieve official status
  • Must be in existence for at least three years prior to application
  • Any funds or earnings of the organization cannot be used to benefit a single member
  • Any profits raised through the organization must be used for charitable actions
  • No political involvement is allowed
  • Must meet public needs
  • Must complete required paperwork, including financial records

Here is an article about 501(c)(3) requirements.

Examples of 501(c)(3) Organizations

There are a number of different organizations out there that are considered 501(c)(3). In fact, chances are you interact with several of them in your normal life, whether you choose to support them or not.

Public Charities

Public charities are some of the most common types of 501(c)(3) organizations. The rule for these is that they must receive no more than 1/3 of their income from unrelated commercial activities and/or investments. These types of charities include:

  • The United Way
  • American Red Cross
  • American Cancer Society
  • Special Olympics

Private Foundations

While most 501(c)(3) organizations are considered ‘public’ there are many private foundations or private operating foundations that can be considered under this classification as well. These foundations are sponsored by private and public sources. Not all private foundations qualify for 501(c)(3) status. Some that do include:

  • Bill and Melinda Gates Foundation
  • GlaxoSmithKline Patient Access Programs Foundation
  • Ford Foundation
  • Carnegie Corporation
  • Paul Getty Trust
  • David and Lucile Packard Foundation
  • Scoliosis Research and Education Foundation

Scientific & Literary Organizations

These include organizations that contribute to the public interest, such as:

  • American Chemical Society
  • Council of Literary Magazines and Presses

Educational Organizations

This category is quite broad as it encompasses most schools including colleges, universities, professional schools, trade schools and even technical academies. It also includes:

  • Zoos
  • Museums
  • Online schools
  • Symphony orchestras
  • Planetariums

Here is an article about some of the different types of 501(c)(3) organizations.

What Makes a Nonprofit a 501(c)(3)?

A nonprofit organization is considered a 501(c)(3) if they receive this designation from the IRS. Receiving the designation means that the organization has applied and been approved as:

‘An organization organized and operated exclusively for exempt purposes … [where] none of its earnings may inure to any private shareholder or individual.’

To qualify for exemption the organization must also fall under one or more of the required designations such as educational, literary, or religious organizations, public charities, or private foundations.

Here is an article about what it means to be a 501(c)(3) organization.

Benefits of Being a 501(c)(3)

There are several benefits to being a 501(c)(3) which include:

  • Benefit 1 : Exempt from federal income taxes
  • Benefit 2 : Contributions are tax deductible
  • Benefit 3 : Exempt from state, sales, and employment taxes (possibly)
  • Benefit 4 : Reduced rates for postage
  • Benefit 5 : Exempt from federal unemployment taxes
  • Benefit 6 : Financing is tax-exempt
  • Benefit 7 : Enhanced credibility of the organization
  • Benefit 8 : Eligibility for grants at all government levels

Here is an article about some of the benefits and drawbacks of 501(c)(3) status.

501(c)(3) Applications

Organizations that wish to apply for 501(c)(3) status may do so by filling out the 501(c)(3) application through the IRS website. Applications are required to be submitted through the electronic system and do require a user fee in order to complete.

The 501(c)(3) application cost can be high for some charitable organizations, but allows these organizations to achieve the designation necessary to be considered tax exempt. Working with nonprofit lawyers can help with the entire process and ensure that the fees paid are accurate.

Step-by-step instructions are provided to ensure organizations know what they need to do to complete the application. This includes a charitable pledge agreement that stipulates the organization is designed to provide a charitable service.

Post a project on ContractsCounsel’s marketplace to get flat fee quotes from lawyers to draft and review contracts. All lawyers are vetted by our team and peer-reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Melissa L. on ContractsCounsel
View Melissa
Member Since:
October 26, 2020

Melissa L.

Free Consultation
Get Free Proposal
Des Moines, IA
14 Yrs Experience
Licensed in IA
City University School of Law

Seasoned negotiator, mediator, and attorney providing premier legal advice, services, and representation with backgrounds in education, healthcare, and the restaurant and manufacturing industries

Ross F. on ContractsCounsel
View Ross
Member Since:
October 27, 2020

Ross F.

Managing Partner
Free Consultation
Get Free Proposal
Bedford, New Hampshire
11 Yrs Experience
Licensed in MA, NH
University of Arizona

I am an experienced technology contracts counsel that has worked with companies that are one-person startups, publicly-traded international corporations, and every size in between. I believe legal counsel should act as a seatbelt and an airbag, not a brake pedal!

Annais N. on ContractsCounsel
View Annais
Member Since:
October 27, 2020

Annais N.

Free Consultation
Get Free Proposal
Miami, FL
9 Yrs Experience
Licensed in FL, LA, MD
Loyola University New Orleans College of Law

Attorney (FL, LA, MD) | Commercial Real Estate Attorney and previous Closing Manager (Driving Growth from $10M to $50M+/month).

John H. on ContractsCounsel
View John
Member Since:
November 10, 2020

John H.

Free Consultation
Get Free Proposal
Mobile, AL
11 Yrs Experience
Licensed in AL
Thomas Goode Jones School of Law

John Daniel "J.D." Hawke is an experienced attorney with a law practice in Mobile, Alabama. He was born in Fairhope, Alabama and after earning his undergraduate degree at Auburn University, he received a law degree from Thomas Goode Jones School of Law in 2010. After law school, he formed the Law Office of J.D. Hawke LLC and over the last decade he has fought incredibly hard for each and everyone of his clients. His practice focuses on representing people facing criminal charges and clients dealing with family law matters. In addition to criminal defense and domestic relations cases, he also regularly handles contract disputes, personal injury cases, small business issues, landlord/tenant disputes, document drafting, and estate planning. He is licensed to practice law in the State of Alabama and the United States District Court for the Southern District of Alabama.

Thomas C. on ContractsCounsel
View Thomas
Member Since:
October 30, 2020

Thomas C.

Free Consultation
Get Free Proposal
Denver, CO
9 Yrs Experience
Licensed in CO
University of Colorado Law School

Thomas Codevilla is Partner at SK&S Law Group where he focuses on Data Privacy, Security, Commercial Contracts, Corporate Finance, and Intellectual Property. Read more at Skandslegal.com Thomas’s clients range from startups to large enterprises. He specializes in working with businesses to build risk-based data privacy and security systems from the ground up. He has deep experience in GDPR, CCPA, COPPA, FERPA, CALOPPA, and other state privacy laws. He holds the CIPP/US and CIPP/E designations from the International Association of Privacy Professionals. Alongside his privacy practice he brings a decade of public and private transactional experience, including formations, financings, M&A, corporate governance, securities, intellectual property licensing, manufacturing, regulatory compliance, international distribution, China contracts, and software-as-a-service agreements.

Michael B. on ContractsCounsel
View Michael
Member Since:
October 30, 2020

Michael B.

Free Consultation
Get Free Proposal
12 Yrs Experience
Licensed in IL, MN, WI
University of the Pacific

Michael has extensive experience advising companies from start-ups to established publicly-traded companies . He has represented businesses in a wide array of fields IT consulting, software solutions, web design/ development, financial services, SaaS, data storage, and others. Areas of expertise include contract drafting and negotiation, terms of use, business structuring and funding, company and employee policies, general transactional issues as well as licensing and regulatory compliance. His prior experience before entering private practice includes negotiating sales contracts for a Fortune 500 healthcare company, as well as regulatory compliance contracts for a publicly traded dental manufacturer. Mr. Brennan firmly believes that every business deserves a lawyer that is both responsive and dependable, and he strives to provide that type of service to every client.

Lyndsey G. on ContractsCounsel
View Lyndsey
Member Since:
October 30, 2020

Lyndsey G.

Free Consultation
Get Free Proposal
Roseville, MN
8 Yrs Experience
Licensed in MN
Mitchell Hamline College of Law

Attorney of 6 years with experience evaluating and drafting contracts, formation document, and policies and procedures in multiple industries. Expanded to estate planning last year.

George O. on ContractsCounsel
View George
Member Since:
November 2, 2020

George O.

Managing Attorney
Free Consultation
Get Free Proposal
Houston, Texas
15 Yrs Experience
Licensed in TX
South Texas College of Law

George is a lifelong Houston resident. He graduated from St. Thomas High School and then Texas A&M University. He obtained his Doctor of Jurisprudence from South Texas College of Law in 2007. He is experienced in real estate, estate planning & probate, civil/commercial matters, personal, injury, business matters, bankruptcy, general counsel on-demand, and litigation. He is active in the community serving as past-president of the St. Thomas Alumni Board, a current member of the Dads Club Aquatic Center Board of Directors, current member of the Dickinson Little Italy Festival of Galveston County Board of Directors, and former PTO President for Briarmeadow Charter School.

Ramsey T. on ContractsCounsel
View Ramsey
Member Since:
November 3, 2020

Ramsey T.

Founding Partner
Free Consultation
Get Free Proposal
New York
25 Yrs Experience
Licensed in NY
William and Mary

My clients are often small and medium size technology companies, from the "idea" stage to clients who may have raised a round or three of capital and need to clean up a messy cap table. I help with all legal matters related to growth that keep founders up at night - hiring people, allocating equity, dealing with shareholders and investors, client negotiations and early litigation counseling (before you need a litigator). I've seen a lot, and because I run my own business, I understand the concerns that keep you up at night. I’ve been through, both on my own and through other clients, the “teething” pains that will inevitably arise as you scale-up – and I’m here to help you. I have over 20 years international experience devising and implementing robust corporate legal strategies and governance for large multinationals. I now focus on start-ups and early/medium stage technology companies to enable a sound legal foundation for your successful business operations. Many of my clients are international with US based holding companies or presences. My 17 years abroad helps me "translate" between different regimes and even enabling Civil and Common Law lawyers to come together. Regularly, I handle early stage financings including Convertible Notes, Seed and Series A/B financings; commercial and technology contracts; international transactions; tax; mergers and acquisitions.

Sammy N. on ContractsCounsel
View Sammy
Member Since:
November 4, 2020

Sammy N.

Free Consultation
Get Free Proposal
Raleigh, NC
3 Yrs Experience
Licensed in NC
Campbell University School of Law

Sammy Naji focuses his practice on assisting startups and small businesses in their transactional and litigation needs. Prior to becoming a lawyer, Sammy worked on Middle East diplomacy at the United Nations. He has successfully obtained results for clients in breach of contract, securities fraud, common-law fraud, negligence, and commercial lease litigation matters. Sammy also counsels clients on commercial real estate sales, commercial lease negotiations, investments, business acquisitions, non-profit formation, intellectual property agreements, trademarks, and partnership agreements.

Brad H. on ContractsCounsel
View Brad
Member Since:
November 5, 2020

Brad H.

Free Consultation
Get Free Proposal
Raleigh, NC
10 Yrs Experience
Licensed in NC
University of North Carolina

Brad is a business attorney with experience helping startup and growing companies in a variety of industries. He has served as general counsel for innovative companies and has developed a broad knowledge base that allows for a complete understanding of business needs.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call