Benefits of 501(c)(3) Status

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on December 14, 2022

Benefit of 501c3 Status

The primary benefit to having 501(c)3 status for your organization is exemption from federal income tax, as well as potentially some state taxes. Any donations made to your organization may also be written off to reduce the donor's taxable income, which may draw in more or larger donations.

What Are the Benefits of 501c3 FAQs

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

A 501(c)(3) organization is a non-profit organization with tax exempt status that is dedicated to the general well-being of society.

What does it costs to file for 501(c)3 status?

Filing for 501(c)3 status starts with filling out Form 1023, which costs $600 to file.

Is a 501(c)(3) organization tax exempt?

A 501(c)(3) organization is tax exempt so long as it remains true to its stated mission and remains compliant with the IRS.

What does 501(c)(3) mean?

501(c)(3) is the internal revenue code (IRC) section for organizations with tax exempt status. 501(c)(3) falls under internal revenue code 501(c).

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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