Julep’s Nonprofit Glossary

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501(c)(3):The section of the Internal Revenue Code that defines nonprofit, charitable, tax-exempt organizations; 501(c)(3) organizations are further defined as public charities, private operating foundations, and private non-operating foundations. These organizations are exempt from federal income tax, and donations are tax-deductible for the donors. Organizations qualifying under this section include religious, educational, charitable, amateur athletic, scientific or literary groups, those testing for public safety, or those involved in the prevention of cruelty to children or animals. Most organizations seeking foundation or corporate contributions secure a Section 501(c)(3) classification from the IRS. Note: The tax code sets forth a list of sections-501(c)(4-26)-to identify other nonprofit organizations whose function is not solely charitable (e.g., professional or veterans organizations, chambers of commerce, fraternal societies, etc.).

501(c)(4): IRS designation for social welfare and advocacy organizations. These are nonprofit organizations exempt from income tax but not eligible to receive tax-deductible gifts because they engage in advocacy-type efforts.

501(c)(6): refers to trade associations and business leagues as defined by the IRS.

501(h) Election: an option for public charities (except churches) to measure their permissible lobbying activity using an expenditure test.

509(a): Section of the tax code that defines public charities (as opposed to private foundations). A 501(c)(3) organization also must have a 509(a) designation to further define the agency as a public charity. (See Public Support Test)

990: Form used by the IRS for annual reporting by nonprofit organizations. This public document is required by the IRS for certain federally tax-exempt, nonprofit organizations that provide information on mission, programs, financial strength, etc.

990-EZ: A version of Form 990 that is filed by organizations with few gross receipts and few assets.

990-PF: A version of Form 990 that is required of 501(c)3 private foundations and 4947(a)(1) non-exempt charitable trusts.

990-N: An electronic version of Form 990 filed by organizations with few gross receipts.