The chart below compares seven federal tax law attributes of five common types of tax-exempt organizations.
Federal tax law attributes of five common types of tax-exempt organizations | 501(c)(3) | 501(c)(4) | 501(c)(5) | 501(c)(6) | 527 |
---|---|---|---|---|---|
Receive tax-deductible charitable contributions | YES | NO | NO | NO | NO |
Receive contributions or fees deductible as a business expense | YES | YES | YES | YES | NO |
Substantially related income exempt from federal income tax | YES | YES | YES | YES | YES |
Investment income exempt from federal income tax | LTD* | YES | YES | YES | NO |
Engage in legislative advocacy | LTD | YES | YES | YES | LTD |
Engage in candidate election advocacy | NO | LTD | LTD | LTD | YES |
Engage in public advocacy not related to legislation or election of candidates | YES | YES | YES | YES | LTD |
*Private foundations are subject to tax on their net investment income.
Interactive training
Learn more about the benefits, limitations and expectations of tax-exempt organizations by attending 10 courses at the online Small to Mid-Size Tax Exempt Organization Workshop.