Glossary / 501(c)(3)
What is 501(c)(3)?
A section of the U.
Simple definition
A section of the U.S. Internal Revenue Code that grants tax-exempt status to nonprofit organizations organized for charitable, religious, educational, scientific, or literary purposes. Donations to 501(c)(3) organizations are tax-deductible for donors.
Why it matters for your nonprofit
Tax-exempt status signals legitimacy to donors, foundations, and partners—and determines whether gifts are deductible on donors' tax returns.
How it shows up in daily work
You incorporate, apply for an EIN, file Form 1023 or 1023-EZ, receive your determination letter, and renew state registrations as required.
Common mistakes
- Fundraising as a charity before IRS approval is final.
- Operating activities outside the approved exempt purpose.
- Missing annual Form 990 filings after approval.
How Alignmint helps
Alignmint ties fund accounting, donor records, and reporting in one place so terms like 501(c)(3) show up correctly in your books—not only in a policy memo.
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