501(c)(3) vs. 501(c)(4): What's the Difference?
Both are tax-exempt nonprofits, and both can work on public causes. The difference comes down to how much they can do in the political arena — and whether donors get a tax deduction.
At a glance
- Donations: gifts to a 501(c)(3) are generally tax-deductible for donors. Gifts to a 501(c)(4) generally are not.
- Lobbying: a 501(c)(3) may lobby only to an insubstantial extent (or within the limits of the 501(h) election). A 501(c)(4) can lobby without limit, as long as the lobbying relates to its social welfare purpose.
- Political campaigns: a 501(c)(3) is absolutely prohibited from supporting or opposing candidates. A 501(c)(4) may engage in some political campaign activity, but it cannot be its primary activity and it may trigger tax and disclosure rules.
- Grants: many foundations and government programs fund only 501(c)(3) organizations.
How each is recognized
A 501(c)(3) applies with Form 1023 or 1023-EZ. A 501(c)(4) must notify the IRS within 60 days of forming by filing Form 8976, and may optionally request a determination letter with Form 1024-A.
Which one fits?
If your work is primarily charitable or educational and you plan to rely on deductible donations and grants, a 501(c)(3) is usually the right choice. If advocacy and legislative change are central to your mission, a 501(c)(4) gives you more room. Some groups run both: a 501(c)(3) for education and services, and an affiliated 501(c)(4) for advocacy, with separate finances and records.
Related service: 501(c) Application Services →