Tax-exempt organization

A tax-exempt organization is a group that is legally recognized as serving a charitable, religious, educational, or similar purpose, which qualifies it for exemption from paying certain taxes, such as income tax. This status is granted by government authorities to support organizations that benefit the public or a specific community. In return, these organizations typically must adhere to specific rules and use their funds to advance their mission. Examples include charities, nonprofits, and religious groups. Tax exemption helps these organizations allocate more resources directly toward their programs rather than taxes.