A 501(c)(3) organization is a type of nonprofit organization in the United States that is exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code (IRC). These organizations are established for religious, charitable, scientific, literary, or educational purposes. Contributions made to 501(c)(3) organizations are often tax-deductible for donors.

Here are key features and characteristics of 501(c)(3) organizations:

1. **Tax-Exempt Status:**
– 501(c)(3) organizations are exempt from federal income tax on their income and may also be exempt from certain state and local taxes.

2. **Charitable Purposes:**
– To qualify for 501(c)(3) status, an organization must be organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.

3. **Prohibition on Political Activities:**
– 501(c)(3) organizations are subject to restrictions on engaging in political activities and lobbying. They are generally prohibited from endorsing or opposing political candidates.

4. **Deductibility of Contributions:**
– Contributions to 501(c)(3) organizations are often tax-deductible for individual donors, subject to certain limitations. This tax deduction is an incentive for individuals to support charitable causes.

5. **Private Inurement and Excess Benefit Transactions:**
– 501(c)(3) organizations are prohibited from benefiting private individuals or insiders excessively. Transactions that result in private inurement or excess benefit to insiders may jeopardize the organization’s tax-exempt status.

6. **Public Support Test:**
– Some 501(c)(3) organizations, especially public charities, are subject to a public support test. This test ensures that a significant portion of the organization’s support comes from the general public, rather than from a limited number of donors.

7. **Form 990 Filing:**
– Most 501(c)(3) organizations are required to file an annual information return, Form 990, with the IRS. This form provides information about the organization’s activities, finances, and governance.

8. **Religious Organizations:**
– Churches and certain religious organizations are automatically considered tax-exempt under 501(c)(3) and are not required to file Form 990. However, they can choose to file Form 990 to establish their tax-exempt status.

9. **Grant Eligibility:**
– Many foundations and government agencies limit their grants and funding opportunities to organizations that have obtained 501(c)(3) status.

10. **Public Charity vs. Private Foundation:**
– 501(c)(3) organizations are classified as either public charities or private foundations. Public charities receive a broad base of support from the public, while private foundations are typically funded by a limited number of sources, such as an individual, family, or corporation.

It’s important for organizations seeking or maintaining 501(c)(3) status to comply with the requirements set forth by the IRS. Additionally, individuals considering making donations to charities should verify the organization’s tax-exempt status and eligibility for tax-deductible contributions.