
Creating a Charitable Non-Profit Organization
Anyone interested in creating a non-profit entity should consult with an experienced tax-exempt organizations attorney to ensure the necessary and proper application is filed. Such an attorney can guide the applicant through the process. What is a Charitable Tax-Exempt Non-Profit Organization? A charity is often a non-stock corporation qualified as tax-exempt under section 501(c)(3) of the Internal Revenue Code. They are often known simply as 501(c)(3)s. These organizations fall into one of three main categories: public charities, private foundations, and private operating foundations. A charitable nonprofit must exist for one or more charitable purposes in order to qualify as tax exempt. Benefits of 501(c)(3) Status Among other benefits, attainting 501(c)(3) status provides such advantages as: Exemption from federal income tax. Grant makers often require federal charitable status. Donations are tax deductible. Many state tax exemptions require 501(c)(3) status. Ability to mail at lower postal rates. Types of 501c3 Organizations There are three main 501(c)(3) categories: Public Charity. The most common charitable entity, public charities conduct operations in pursuit of a charitable mission. Typically, such organizations receive donations from the public and may receive funding from sponsorships and grants. Private Foundation. A private foundation does not necessarily conduct direct operations but