{"id":1742,"date":"2021-12-07T14:00:00","date_gmt":"2021-12-07T14:00:00","guid":{"rendered":"https:\/\/www.roundupapp.com\/?p=1742"},"modified":"2022-08-03T18:09:57","modified_gmt":"2022-08-03T18:09:57","slug":"501c3-vs-501c4-how-one-little-number-can-tell-you-a-lot","status":"publish","type":"post","link":"https:\/\/www.roundupapp.com\/post\/501c3-vs-501c4-how-one-little-number-can-tell-you-a-lot\/","title":{"rendered":"501(c)(3) VS 501(c)(4): How One Little Number Can Tell You a Lot."},"content":{"rendered":"\t\t
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501(C)(3)s and 501(C)(4)s are the two most commonly used nonprofits<\/a> in the United States. While at first glance they might seem similar, there are critical differences between the two. In fact, one little number can tell you a lot about what the organization does.<\/p>\n

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What is a 501(c)(3)?<\/h2>\n

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501(c)(3)\u2019s are defined as United States corporations, trusts, or other types of organizations that are exempt from federal income tax according to the IRS. These are organizations that are operated exclusively for religious, charitable, scientific, or educational purposes.\u00a0<\/p>\n

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Donations made to a 501(c)(3) are tax-deductible<\/a> and help those organizations support their religious, charitable, scientific, or educational missions. 501(C)(3)s have limits on the amount of lobbying, advocacy, or other forms of political activity they can take part in.<\/p>\n

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Examples of 501 (c)(3)s\u00a0<\/h3>\n

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Since 501 (c)(3)s take on a variety of missions, there are tons of nonprofits listed as 501 (c)(3)s. RoundUp App gives donors a way to donate to any of the 1.5+ million 501(C)(3) organizations in good standing with the IRS. From Addisons Princess for a Day Fundraiser<\/a> to Zoe\u2019s Home<\/a>, we\u2019re connecting donors to the causes they support.<\/p>\n

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Consider a local food bank, i’s likely classified as a 501(C)(3). Food banks take donations from their donors and supply their local communities with needed food assistance. These groups can also educate the general public, including politicians about food insecurity. However, they can\u2019t directly endorse a candidate or directly lobby for a cause.<\/p>\n

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What type of work can 501(c)(3)s engage in?<\/h3>\n

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501(c)(3)s are often created for advocacy or educational purposes. They might provide a range of diverse services to local communities or a targeted population. 501(c)(3)s could distribute food to the hungry, create educational programs in schools, help set up health clinics in rural areas, or contribute to medical research.<\/p>\n

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In general, 501(C)(3)s are designed to help raise awareness about specific causes. They can even endorse legal measures and propositions that are relevant to their purpose.<\/p>\n

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What restrictions do 501(c)(3)s have on the work they do?<\/h3>\n

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Since 501(c)(3)s are tax-exempt and have limits on their political action, they can\u2019t control which candidate receives certain information. If a 501(c)(3) lobbies for their cause, they must lobby all interested parties. They also have limitations on what information they can provide to candidates.\u00a0<\/p>\n

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Take for example a 501(c)(3) dedicated to protecting the environment. If they wish to provide a particular candidate with their mailing lists related to their cause, they must also allow every candidate in the field to access that same mailing list. Additionally, when advocating for their causes, nonprofits that are organized as 501(c)(3)s can express an opinion on elected officials, but they can\u2019t make any personal critiques of that official.<\/p>\n

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What is a 501(c)(4)<\/h2>\n

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A 501(c)(4) is classified as a social welfare group. They can advocate for causes and propositions similar to how a 501(c)(3) can but have some critical differences. The key difference between a 501(c)(3) and a 501(c)(4) is that 501(c)(4)s can endorse specific candidates and directly lobby for their causes.<\/p>\n

Given their ability to endorse specific candidates, as well as their increased ability to lobby, advocate, and conduct various types of political activity with their funds, donations to 501(c)(4)s are not tax-deductible.\u00a0<\/p>\n

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What type of work can (c)(4)s engage in?<\/h3>\n

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501(c)(4)s operate a bit differently than 501(c)(3)s. Both 501(C)(4)s and 501(C)(3)s are tax-exempt, however 501(C)(4)s have fewer rules on the type of lobbying and endorsement they’re allowed to participate in.<\/p>\n

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There are no limits to the amount of lobbying 501(c)(4)s can participate in. 501(C)(4)s can also pay political organizations, get candidates to sign pledges on issues, and officially back those candidates who support their mission.<\/p>\n

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What restrictions do 501(c)(4)s have on the work they do?<\/h3>\n

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Like we mentioned above, 501(c)(4)s have very few restrictions on the type of political advocacy and action they can take. Because of this they\u2019re better able to endorse, lobby, and support their causes in the political realm.<\/p>\n

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Example of 501 (c)(4) Organizations<\/h3>\n

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A well-known 501(C)(4) organization registered in the United States is The Fairness Project. As they describe it, their mission is to \u201chelp us put progressive issues on the ballot to expand health care and win social, racial, and economic justice.\u201d Rather than focusing solely on educating people about issues related to healthcare, social, racial, and economic justice, The Fairness Project participates directly in politics. They might lobby members of Congress to support healthcare-related bills, endorse candidates who support racial justice or advocate for new bills that feature progressive economic ideas.<\/p>\n

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Since they are a 501(c)(4) that participates directly in politics, donations made to The Fairness Project are not tax-deductible.\u00a0<\/p>\n

Other examples of 501c4 organizations include:<\/p>\n