501(c)(3) Hear it!

501(c)(3) Finance Definition

The section in the Internal Revenue Service tax code that describes the criteria an organization has to meet in order to receive tax-exempt status; such an organization is a 501(c)(3) organization. The organization may be charitable or religious, or it may be set up to promote common interests, such as the environment or running. One advantage of being classified as a 501(c)(3) is that donors can deduct their contributions from their income taxes.