A 501(c)(3) nonprofit is a nonprofit organization that the Internal Revenue Service (IRS) recognizes as tax-exempt (excused from paying federal income tax) because it is organized or operated primarily for religious, charitable, scientific, educational, or similar purposes. However, the organization may participate in minor, non-exempt activities as long as they do not make up a substantial part of its activities.

501(c)(3) nonprofits are sometimes called “charitable organizations.” To keep their tax exempt status, charitable organizations must follow certain conditions, including:

1. no one in the organization can take the organization’s earnings for themselves;

2. no substantial portion of the organization’s activities may be attempts to influence legislation or lobby; and

3. the organization cannot take part in political campaigns.