A 501(c) organization and a 501(c)(3) organization are similar in designation, however they differ slightly in their tax benefits. Both types of organization are exempt from federal income tax, however a 501(c)(3) may allow its donors to write off donations whereas a 501(c) does not.
Activities and Restrictions
501(c) organizations are generally free to engage in any lawful activity, while 501(c)(3) organizations are subject to more restrictions on their activities, such as limitations on political lobbying and campaigning.
Establishing and Maintaining Exemption
Obtaining exemption needs establishing the entity first. Like a nonprofit corporation with the Secretary of State. Then apply for tax exemption. Must file returns annually. Report changes from audits or termination.
Additional Information
Some common nonprofit options: 501(c)(3) is most common—must fit an exempt purpose defined by the IRS like educational. Restriction: No profits can benefit directors or officers.