{"id":16123,"date":"2021-05-05T04:42:43","date_gmt":"2021-05-05T11:42:43","guid":{"rendered":"https:\/\/donorbox.org\/nonprofit-blog\/?p=16123"},"modified":"2025-01-10T10:26:53","modified_gmt":"2025-01-10T18:26:53","slug":"start-a-501c4-organization","status":"publish","type":"post","link":"https:\/\/donorbox.org\/nonprofit-blog\/start-a-501c4-organization","title":{"rendered":"How to Start a 501(c)(4) Organization | 9-Steps Guide"},"content":{"rendered":"

Did you know that the United States tax code recognizes 29 types of tax-exempt organizations? Most people have a certain image when they think of nonprofits, but 501(c)(4) organizations qualify for many of the same tax exemptions as 501(c)(3) nonprofits, with fewer restrictions.\u00a0\u00a0<\/span><\/p>\n

IRS Code 501(c)(4) provides for the federal tax exemption of certain civic leagues, social welfare organizations, and local associations of employees who meet specific criteria and complete the steps to apply for 501(c)(4) status.<\/span><\/p>\n

Starting a 501(c)(4) requires hard work and lots of careful planning. But, when done right, starting a 501(c)(4) organization can be an incredibly rewarding, purpose-filled experience that helps your community.<\/span><\/p>\n

In this post, you\u2019ll learn the step-by-step process of how to start a 501(c)(4) social welfare organization.<\/span><\/p>\n

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What is a 501(c)(4)?<\/h2>\n

A 501(c)(4)<\/span> is a tax-exempt organization that exists to promote causes related to social welfare. 501(c)(4)<\/span> organizations are commonly active in political<\/a> and advocacy-related causes.<\/p>\n

The IRS explains more about these groups under Section 501(c)(4)<\/a> of the tax code. Interestingly, the IRS notes<\/a> that providing an exact definition of what types of organizations can be a 501(c)(4)<\/span> is a bit tricky:<\/p>\n

\u201cAlthough the Service has been making an effort to refine and clarify this area, section 501(c)(4) remains in some degree a catch-all for presumptively beneficial nonprofit organizations that resist classification under the other exempting provisions of the [501c] Code.\u201d<\/em><\/p>\n

For example, the Planned Parenthood Action Fund<\/a>, Sierra Club<\/a>, National Rifle Association<\/a>, and American Civil Liberties Union<\/a> are all high-profile 501(c)(4) organizations engaged in political dialogue and action.<\/p>\n

One important note is that while 501(c)(4)<\/span> organizations are tax-exempt, donations to a 501(c)(4)<\/span> are not tax-deductible for the donor.<\/p>\n

\"501c4\"<\/strong><\/a><\/p>\n

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501(c)(3) vs 501(c)(4): What\u2019s the difference?<\/h2>\n

When you have a cause you\u2019re passionate about and a well-thought-out plan, starting a tax-exempt organization can be a great way to make an impact.<\/p>\n

But, how do you know whether you should file as a 501(c)(3) charity or a 501(c)(4)<\/a> social welfare organization? What are a 501(c)(4)<\/span>\u2019s advantages over a 501(c)(3)? There are some key differences between the two that will impact your choice.<\/p>\n

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Characteristics of 501(c)(3) Organizations<\/h3>\n