501(c) classification

A 501(c) classification refers to a section of the U.S. Internal Revenue Code that grants tax-exempt status to certain nonprofit organizations. These organizations, which can include charities, religious groups, and educational bodies, do not have to pay federal income tax, allowing them to use more resources for their missions. To qualify, they must operate for specific purposes, such as charitable, religious, or scientific work, and they must adhere to rules regarding political activities and profits. This status also allows donors to contribute tax-deductible donations, encouraging financial support for these organizations.