What Is a 501(c)(3)? Why Become a 501(c)(3)?

The nonprofit world is full of references to a 501(c)(3). Sometimes the term refers to an organizations status and sometimes it refers to the organization itself. What is a 501(c)(3), and why do so many nonprofits take it seriously?

501(c)(3) Defined

The term 501(c)(3) refers to the section of the U.S. Tax Code that grants tax exemption to a wide range of charities. Section 501(c) in general has over thirty sections, all of which grant tax exemption to a specific kind of organization. The vast majority of private charities in the U.S. fall under section 501(c)(3).

To be eligible for tax-exempt status under section 501(c)(3) (or, in other words, to be a 501(c)(3)), an org