Everything You Should Know About 501(c)(3) Organizations
Everything You Should Know About 501(c)(3) Organizations
If you’re like most people, you may have stumbled upon the 501(c)(3) designation on a nonprofit’s mailing or heard it in the news, but you’re not quite sure what it exactly means. That’s probably why you’re reading this post right now.
Here, you’ll finally learn what 501(c)(3) is, its two types, what organizations qualify, how tax exemptions work, and why you should consider donating to a 501(c)(3) nonprofit. Without further ado, let’s get started!
What’s a 501(c)(3) Organization?
In its simplest definition, a 501(c)(3) organization is a nonprofit that is exempt from paying federal income taxes. Such organizations are often praised for their charity work in the community, and it doesn’t come as a surprise that they have hundreds of thousands of supporters.
For a nonprofit to achieve tax exemption as a 501(c)(3) organization, it should serve at least one of the purposes below:
- Charity
- Religious
- Scientific
- Education
- Literary
- Preventing children or animal cruelty
- Fostering amateur sports competition
- Public safety testing
Furthermore, the nonprofit should be able to explain how it serves the public good. It must prove that it’s organized and operated for a specific approved purpose. Here are some of the approved purposes as cited by the IRS:
- Relief of the poor or distressed
- Advancement of religion, education, or science
- Lessening community tensions
- Defense of human and civil rights secured by law
- Elimination of prejudice and discrimination
- Combating juvenile delinquency and community deterioration
- Erection or maintenance of public buildings or monuments
The 2 Types of 501(c)(3) Organizations
501(c)(3) organizations can be classified into two basic types: public charities and private foundations.
A public charity, which is defined by the IRS simply as “not a private foundation,” receives most of its income from the general public or the government. On the other hand, a private foundation gets its income from investments and endowments.
How Does Tax Exemption Work?
Organizations that are eligible for tax exemptions can receive grants from private foundations and the government, as well as special postage rates, nonprofit rates, and other discounts. At the same time, they can provide tax deductions to their donors.
Another important thing to know about tax exemption is that it offers limited protection from lawsuits. The staff and board members of a 501(c)(3) nonprofit benefit from legal protection, though the protection might not be enough to cover all circumstances. Despite this, 501(c)(3) nonprofits are still advised to purchase certain types of insurance, such as property insurance and worker’s compensation.
Why Donate to a 501(c)(3) Nonprofit?
There are two reasons why you’d want to contribute to a 501(c)(3) nonprofit. First, you get to make a difference in the lives of the nonprofit’s beneficiaries. Second, you’ll be the recipient of a top tax deduction!
Kids Car Donations Works with IRS-Certified 501(c)(3) Organizations!
If you think that donating a vehicle to Kids Car Donations makes you eligible for a hefty tax write-off, you’re absolutely right! Plus, your auto donation will be used to help save the lives of the critically ill young people in your community and improve or restore the health of other pediatric patients.
Our team will auction off your donated automobile and hand over the proceeds to reputable children’s nonprofit organizations that we are in partnership with. These IRS-certified 501(c)(3) nonprofits use the funding we give them to provide their young beneficiaries with free and easy access to a wide range of pediatric health services, emotional support, and other essential health care services.
Within 30 days following the sale of your donated vehicle, we’ll mail you your 100% tax-deductible sales receipt. You’ll need this document to claim your top tax deduction in the next tax-filing season.
You’ll also benefit from our fast and free towing service which we offer our donors anywhere in the United States. Just let us know when and where you prefer to have your vehicle hauled away, and we’ll coordinate with a licensed towing company to have it picked up.
That’s not all. The best part about becoming our donor is the priceless joy of knowing that your act of charity will be used to help the ailing kids in your community regain their vitality and have a bright future.
We accept almost all types of vehicles, even those that are no longer running well. Visit this page for a complete list of vehicle types qualified for our donation program.
If you’re interested to learn more about our donation process, you may visit our FAQs page. For inquiries, feel free to reach us at 866-634-8395 or send us a message here. We’ll respond to you as soon as we can.
Spread Happiness to Indigent Families with Ailing Kids Today!
Team up with Kids Car Donations and you’ll be bringing joy into the hearts of your underprivileged neighbors with bedridden kids while giving yourself tax rewards to smile about. Call Kids Car Donations at 866-634-8395 or fill out our secure online donation form now!