A 501(c)(4) organization is a social welfare nonprofit. Its primary purpose is to promote civic betterment and social welfare. To qualify for 501(c)(4) status, an organization must be organized and operated exclusively for these purposes.
Political Activity and Tax Status
A 501(c)(4) can engage in lobbying and political activities, unlike 501(c)(3) charities. However, contributions to 501(c)(4)s are not tax deductible. Many 501(c)(4)s still seek IRS approval of their tax-exempt status to show legitimacy.
Examples and IRS Compliance
Examples of 501(c)(4) nonprofits include:
- Social advocacy groups
- Associations of employees
- Civic leagues
Their activities may involve:
- Improving community health
- Promoting tenants’ rights
- Supporting volunteer fire companies
To establish a 501(c)(4), meticulous planning is necessary. The organization’s overall goal and activities must align with requirements for tax exemption. They file Form 1024 to apply for tax-exempt status. As nonprofits, 501(c)(4)s don’t pay income tax unless engaged in unrelated business activities.