What Can You Do With a 501(c)(3)? Understanding IRS Charitable Purposes

No video

What Can You Do With a 501(c)(3)? Understanding IRS Charitable Purposes

Рет қаралды 21,437

Күн бұрын

When you hear the term nonprofit, the first thing that typically comes to mind is a charity, or 501(c)(3) organization. That’s for good reason, since roughly 78% of all tax-exempt organizations are exempt under IRC Section 501(c)(3). The remaining 22% consists mostly of social welfare nonprofits, business leagues, and social/recreation clubs, plus about 24 less-voluminous possibilities.
But what does it mean to be a 501(c)(3) nonprofit? What sets a 501(c)(3) apart from the other categories of nonprofits out there? In a phrase: charitable purpose.
📚 ADDITIONAL RESOURCES
•eBook: Successfully Starting a Nonprofit bit.ly/3M0Nj41
•VIDEO: How to Start a 501(c)(3) Nonprofit? • How Do You Start a 501...
•BLOG ARTICLE: How the IRS Defines Charitable Purpose bit.ly/3ypY4J8
🏆 YOUR NEXT STEP:
•Fill out this form for a FREE consultation on how to start a nonprofit: bit.ly/3Tu9nYE
•Register for Fundraising TV: www.501c3.org/...
•Download the FREE eBook “10 Things You Need to Know Before Starting a Nonprofit” bit.ly/3XhFag0
0:00 Introduction
0:40 IRS Restricts Purposes
1:16 Religious
2:50 Scientific
3:58 Testing for Public Safety
4:44 Literary
5:07 Educational
6:32 Fostering National and International Amateur Sports
7:51 Prevention of Cruelty to Animals and Children
8:26 Charitable
9:08 Conclusion

Пікірлер: 40

@FoundationGroup 2 жыл бұрын

If you need help filing for IRS 501(c)(3) status, we’d love to help! You can fill out our contact form at bit.ly/3i6rFxz or give us a call at 888-361-9445.

@tiffanywaters8156 10 ай бұрын

Very helpful I like how you explained everything cuz reading it I was Lost

@FoundationGroup 10 ай бұрын

Glad it helped!

@tworebelsoffgrid 10 ай бұрын

Just subscribed! This was SO helpful! Thank you for this video. We are looking at the Educational 501(c)(3) for our off-grid, sustainable farm. We will be teaching workshops and hosting experiences on living off-grid, sustainability, permaculture, natural building, and growing food & animals. We were trying to figure out where we best fit and this helped us confirm Educational! Thanks so much and we will be digging into your other videos. Cheers!

@FoundationGroup 10 ай бұрын

Glad you found it helpful! Definitely check out our other videos. We usually put out new ones about twice per month.

@tworebelsoffgrid 10 ай бұрын

@@FoundationGroup Will do! Thank you!

@vernonpeterson3323 7 ай бұрын

One fact for churches that should be mentioned is that they are not required to have a 501C3 filing. They are automatically exempt. The only advantage is that you are on their list for exemption and have an easier venue for defending their status.

@FoundationGroup 6 ай бұрын

It also makes it easier for a donor under audit. We've seen donations to churches without an IRS determination letter disallowed when a donor's charitable deduction was audited. It's a cheap shot by the IRS, and one that is defendable, assuming the donor has good representation. But that's not always the case.

@larry-kp9sp 5 ай бұрын

@@FoundationGroup a friend of mine claimed tithes on her income tax. She didn't even go to church.

@hamsael-assaad2672 Жыл бұрын

Thank you and I will call

@KehillahHamashiach 8 ай бұрын

Thank you!

@MindfulVideos1000 7 ай бұрын

Would feeding the homeless fall under the charitable category in the 501c purposes?

@FoundationGroup 6 ай бұрын

Generally speaking, yes.

@unbelieveable882 7 ай бұрын

How is the money distributed, who gets to determine what it is uses for? What if you just want to keep the money? Talk about this.

@FoundationGroup 6 ай бұрын

There is a rule called the "permanent dedication of assets". This rule states that all assets of a 501(c)(3), no matter how those assets were acquired, are permanently dedicated to a charitable purpose. This means that any money donated must be used in furtherance of the charitable purpose for which the IRS granted the nonprofit 501(c)(3) status. That includes expenditures related to reasonable overhead, not just direct program costs. But is also means that you can't just "keep the money". Taking money out of the nonprofit for personal use, assuming that it's not in the form of salary, is called embezzlement.

@Searchin4tone 25 күн бұрын

My friend is under the impression this type of program is completely funded by the government, no m oney out of pocket besides the initial investment for example purchasing the property along with contracting services for the disabled. Is this person on point?

@FoundationGroup 21 күн бұрын

Not completely following the question. 501(c)(3) orgs can be funded by any number of sources, including individual and corporate donations, sales of related goods and services, and governmental units. If that's not the question, you can reply and clarify.

@dianeko7640 Жыл бұрын

How about a coop for a group of homescoolers. Could it apply for a 501c 3 .

@RaisingSeeds Жыл бұрын

Great question

@nighthiker8872 10 күн бұрын

If you had a small church as your main headquarters, with address. You could reach the world.

@waynecmontgomery 2 жыл бұрын

🤣🤣🤣 Thank you, Greg !!!

@FoundationGroup 2 жыл бұрын

You bet!

@alip.9740 24 күн бұрын

What about a private cemetery that's not connected to an active church?

@FoundationGroup 21 күн бұрын

Private cemeteries will usually qualify to be tax-exempt under 501(c)(13), not 501(c)(3). See our article on the subject: www.501c3.org/death-and-taxes-understanding-501c13-cemetery-companies/

@jafarakechmalueth6168 18 күн бұрын

I really want to help the orphans and the children of homeless families in our country by providing them with fully funded scholarship but I didn’t get access I wish you could help me, our children are struggling with theirs life 😢

@mihindv939 Жыл бұрын

Can a non-US citizen be an initial director for a US nonprofit in New York state and still get tax-exempt status?

@honey.badger 11 ай бұрын

Which category would environmental stuff like planing trees and saving birds and bees fall into? Charitable?

@FoundationGroup 11 ай бұрын

Great question, and the answer is not as straightforward as you might think. Animal welfare is a charitable category under 501(c)(3), so things like habitat protection and such qualify. However, it's not as simple with flora. General environmental issues tend to fall under 501(c)(4), which is public benefit as opposed to charitable benefit. Rule of thumb is that if the beneficiary is mostly fauna, c3. Mostly flora or generally environmental, c4.

@honey.badger 11 ай бұрын

@@FoundationGroup ah ok, got it, thank you. this would fall under animal welfare bc the goal is to plant trees to reverse the devastation done by humans. with urban development, we have less trees which is the home and food supply for wildlife like birds, bees, bats, squirridaes 🐿️, etc.

@maryampofo2863 11 ай бұрын

Does the 5O1C3 work in Africa?

@FoundationGroup 2 ай бұрын

You can have a 501c3 that works in Africa. The key thing to remember is that a 501c3 must be a US-based organization. Other countries have nonprofits and NGOs, but 501c3 status is a uniquely American status that is based squarely on federal taxability or exemption thereof.

@williewilliamsii8205 Жыл бұрын

Hello I need some help determining which one I need to apply for. So I am a fan of a nfl team and I have a fan group of that team. We do raffles that bring in a significant amount of money. I do take the money and put it towards the group. Supplies, website etc. I do want to be safe though. So which 501 c does my group fall under? Any info is appreciated thank you.

@FoundationGroup Жыл бұрын

What you're describing sounds like a 501(c)(7), not a 501(c)(3). 501(c)(7) organizations are for social and/or recreational purposes, not charitable. I recommend you check out our video on "What Is a 501(c)(7)" - kzfaq.info/get/bejne/m7B-nr1z0tzenXk.html .

@shwnshts9469 11 ай бұрын

This is exactly why 501 needs to be abolished. Your hobby group gambling on football and fantasy league meatball bs IS NOT A CHARITY or ANYTHING NON PROFIT... you're piggybacking off the NFL FFS

@jenny-lynnmiller885 2 жыл бұрын

Who can I contact to get clarification of my 501c3 wanting an invoice of what members attended and paid for a field trip, but it wasn't organized by the 501c nor did payment go through them.

@FoundationGroup 2 жыл бұрын

Without knowing more detail, we would suggest having the nonprofit put you in touch with whoever managed the payments, assuming the nonprofit doesn't have those details already. Someone should be able to provide that data to you.

@jenny-lynnmiller885 2 жыл бұрын

@@FoundationGroup what I am looking for is where I can look up the 501c3 regulations covering this type transaction. I disagree with the nonprofits interpretation and want to see it for myself.

@FoundationGroup 2 жыл бұрын

@@jenny-lynnmiller885 I don't think you're going to find explicit rules for what you're describing. So much of what governs 501c3 activity is more generalized regulations that are extrapolated to fit a particular situation. IRS Publication 557 is probably the place to start, but you may have a challenge overlaying precisely what you're looking for.