Contents

• 501(c)(3) Public Charity Tax-Exempt Status Required
• 501(c)(4) Social Welfare Organizations
• 501(c)(4) Volunteer Fire Companies
• Applying for 501(c)(3) Public Charity Status

501(c)(3) Public Charity Tax-Exempt Status Required

The Internal Revenue Service (IRS) distinguishes in granting tax exemption to nonprofit organizations based on their organizational and operational structure. While the IRS does provide tax benefits for other types of nonprofits (see list here), only 501(c)(3) Public Charities are eligible for TechSoup and our corporate partners nonprofit programs.

Learn more about the 501(c)(3) Public Charity requirement.

501(c)(4) Social Welfare Organizations

A 501(c)(4) Civic Leagues and Social Welfare Organizations and Local Associations of Employees is not organized for profit and is operated exclusively for the promotion of social welfare. Social welfare purposes are broader than charitable purposes.  As a result, 501(c)(4) organizations are permitted to engage in a broader range of activities than 501(c)(3) charities and are not granted the same tax benefits as 501(c)(3) charities. For example, while 501(c)(3) charities are only permitted to engage in an insubstantial amount of lobbying, 501(c)(4) organizations are permitted to engage in unlimited lobbying in furtherance of their social welfare purposes. 501(c)(4) organizations are also permitted to engage in political campaign activity, as long as it is not its primary activity, which is prohibited under section 501(c)(3). Finally, in general, contributions to 501(c)(4) organizations are not tax-deductible as charitable contributions (with limited exceptions for volunteer fire companies and war veterans’ organizations). 501(c)(3) charities, however, are automatically permitted to receive tax-deductible charitable contributions from donors.

In short, the IRS treats 501(c)(4) organizations differently from 501(c)(3) charities precisely because they have significantly more latitude in their operations than 501(c)(3) charities. Donors typically prefer the assurance that their contributions will not be utilized for social or political purposes, and such an assurance can only be obtained through an IRS certification of its status as a 501(c)(3). Therefore, programs available through TechSoup are provisioned with a strict focus on 501(c)(3) public charities per agreements with our corporate partners. Organizations with other statuses fall outside of that scope.

501(c)(4) Volunteer Fire Companies

A 501(c)(4) Volunteer Fire Company, is a social welfare organization whose members are actively engaged in firefighting and similar disaster assistance.

While a 501(c)(4) Volunteer Fire Company may resemble, and in some instances may also qualify as, a 501(c)(3) charity, 501(c)(4) organizations are permitted to engage in a broader range of activities than 501(c)(3) charities. For example, a 501(c)(4) Volunteer Fire Company is permitted to have independent social purposes, allowing it to provide death and medical benefits to its members and to provide recreational facilities for use by its members. Additionally, a 501(c)(4) Volunteer Fire Company is permitted to engage in unlimited lobbying in furtherance of its social welfare purposes. It is also permitted to engage in some political campaign activity. Each of these activities is prohibited under section 501(c)(3).

501(c)(4) Volunteer Fire Companies that do not engage in these prohibited activities may also qualify for exemption under section 501(c)(3) as charitable organizations.

Applying for 501(c)(3) Public Charity Status

Certain 501(c)(4) social welfare organizations, such as 501(c)(4) Volunteer Fire Companies, may also qualify for exemption under section 501(c)(3) as a charitable organization, if such organizations meet the requirements for exemption under those sections. If you believe that your organization meets the requirements under section 501(c)(3), then we encourage you to visit the IRS’s Application for Recognition of Exemption for the 501(c)(3) filing process. Our blog post, U.S. Nonprofit Startup Resources, also has useful information on the process.

Once you receive a determination letter from the IRS indicating your organization meets the requirements under Section 501(c)(3), TechSoup should be able to qualify your organization.