Overview of 501(c)(3) Organization Donations
A donation to a 501(c)(3) organization is typically tax-deductible. Individuals can claim donations as deductions up to 50% of adjusted gross income. Non-cash gifts also apply but valuation is key. Large non-cash gifts over $10,000 may require professional appraisal. Vehicle gifts have special rules. Public charities must receive revenue from public or government.
IRS Rules for 501(c)(3) Donations
To maintain 501(c)(3) status, the IRS requires at least one third of the income come from public donations, regular payment of dues, and an avoidance of political activity. Individuals and companies that donate to a 501(c)(3) public charity can deduct up to 60% of their AGI.
Benefits of Donating to a 501(c)(3)
A 501(c)(3) organization is a nonprofit that enjoys special, tax-exempt status. Donations to 501(c)(3) nonprofits are tax-deductible. Individuals can deduct up to 50% of adjusted gross income.
Additional Information
Qualified 501(c)(3) nonprofits can buy items tax-free that further their charitable purpose. They can accept sponsorships to help accomplish their mission. Nonprofits come with a lot of rules and regulations. The federal tax code lists several different types of tax-exempt organizations. Organizations with IRS 501(c)(3) status can receive several benefits such as tax-deductible donations, exemption from federal income tax, and eligibility for grants and other forms of funding.
501(c)(3) organizations must have a board of directors that governs the organization. Public charities are the most common type of 501(c)(3) nonprofits. Private foundations are subject to stricter rules and regulations than public charities.