501(c)(3) or 501(c)(4): which one fits your group

This guide is for founders who care about a cause and aren't sure which kind of nonprofit to form: a group that wants to run programs and win grants, or one that wants to push hard for a change in the law. Both are "nonprofits," and both are tax-exempt, but the IRS treats them very differently. A 501(c)(3) is a charity. A 501(c)(4) is a social welfare organization. After reading, you'll know what each is for, which one lets donors deduct their gifts, how much each may lobby or take part in elections, the notice a 501(c)(4) owes the IRS within 60 days, and when some groups run one of each.

If you're still deciding whether to form anything, start with Should I start a charity? and the structure chooser.

Two kinds of tax-exempt group

The names come from the part of the tax code that exempts them: section 501(c), paragraphs (3) and (4).

• 501(c)(3): charities. The IRS says a 501(c)(3) must be "organized and operated exclusively for exempt purposes," such as charitable, religious, educational or scientific work. Food banks, after-school programs, animal shelters and most of the groups readers of this site run are 501(c)(3)s.
• 501(c)(4): social welfare organizations. The IRS says a 501(c)(4) must "not be organized for profit and must be operated exclusively to promote social welfare," which means operating "primarily to further the common good and general welfare of the people of the community." Many advocacy groups, and some civic leagues and community associations, are 501(c)(4)s.

Neither kind can be run for private gain. The IRS says none of a 501(c)(3)'s earnings "may inure to any private shareholder or individual," and uses almost the same words for a 501(c)(4).

Can donors deduct their gifts?

This is often the deciding question.

• Gifts to a 501(c)(3) are generally deductible as charitable contributions, because a 501(c)(3) charity is a "qualified organization" under IRS Publication 526. Donors have generally had to itemize to deduct them, but the IRS says that beginning with tax year 2026, people who don't itemize may deduct up to $1,000 ($2,000 if filing jointly) of cash gifts to certain qualified organizations. Many foundations also give only to 501(c)(3)s.
• Gifts to a 501(c)(4) generally aren't. The IRS says contributions to civic leagues or other 501(c)(4) organizations "generally are not deductible" as charitable contributions. The IRS says a business may sometimes deduct the payment as an ordinary and necessary business expense instead, and points to separate rules that limit deductions for lobbying and political spending. A 501(c)(4) may also have to tell people, when it asks for money, that gifts aren't deductible.

So a 501(c)(4) usually raises money from people who give because they back the cause, not for a tax break, and it has far fewer foundation grants to apply for.

Lobbying and elections

The two kinds have very different limits. Our guide to political activity and lobbying explains the 501(c)(3) rules in detail.

501(c)(3): The IRS says a 501(c)(3) "may not attempt to influence legislation as a substantial part of its activities" and warns that too much lobbying "risks loss of tax-exempt status." On elections the rule is stricter: all 501(c)(3)s are "absolutely prohibited" from intervening in political campaigns, for or against any candidate. Breaking that rule can cost a charity its exemption and lead to excise taxes.

501(c)(4): The IRS says lobbying for laws related to the group's programs "is a permissible means of attaining social welfare purposes," and it can be the group's main work. The IRS says promoting social welfare "does not include" taking part in political campaigns, so a 501(c)(4) may do some only if it isn't its primary activity. That spending may be taxed under section 527(f). A 501(c)(4) that collects member dues and lobbies may also have to tell members how much of their dues went to lobbying, or pay a "proxy tax" instead.

Getting started with the IRS

A 501(c)(3)

You apply for recognition with Form 1023, or the shorter Form 1023-EZ if you qualify. The IRS user fee is $600 for Form 1023 or $275 for Form 1023-EZ, paid through Pay.gov. Our founder pathway covers forming your nonprofit step by step.

A 501(c)(4): the 60-day notice

A new 501(c)(4) must tell the IRS it exists by filing Form 8976, Notice of Intent to Operate Under Section 501(c)(4). The key facts, from the IRS:

• When: "no later than 60 days after the organization is established," for most organizations.
• How: online only, through Pay.gov.
• Fee: $50, paid with the notice. If it isn't paid within 14 days, the notice is rejected.
• Late penalty: $20 a day, up to $5,000.
• What comes back: the IRS says to expect an acknowledgment within 60 days.

Form 8976 is a notice, not an application. If you also want an IRS letter confirming your status, which some banks, landlords and funders ask for, you can apply with Form 1024-A, also filed online through Pay.gov. The IRS is clear that filing Form 1024-A "does not relieve an organization of the requirement to submit Form 8976." Check the user fee for Form 1024-A on Pay.gov when you file.

Running one of each

Some causes run two groups side by side: a 501(c)(3) for education, research and services, and a 501(c)(4) for lobbying and, within limits, election work. This is legal. An IRS training article on affiliated organizations says a 501(c)(3) "can establish and control" a 501(c)(4) to conduct lobbying, and points to a 1983 Supreme Court case that relied on that option.

The catch is that the two must really be separate. The same IRS article says the IRS will treat them as separate if:

1. the 501(c)(4) is separately organized, with its own employer identification number (EIN);
2. it keeps its own records and bank accounts;
3. any paid officers, directors or staff who work for both split their time between the two, based on what they actually do for each;
4. the groups reasonably share the cost of anything else they share, like an office, equipment or software.

Above all, the 501(c)(3) must not pay for the 501(c)(4)'s political work or substantial lobbying, directly or through cheap rent, free staff time or its mailing list. The article also says a 501(c)(3) may not set up a political action committee (PAC) to support or oppose candidates.

Running two organizations means two boards to manage, two sets of books and two sets of IRS and state filings. For most small groups starting out, that's a lot. It usually makes sense only once the advocacy work is big enough to need its own home.

How to choose

Ask yourselves these questions:

• What is our main work? Programs, services, education or research point to a 501(c)(3). Changing laws as the main activity points to a 501(c)(4).
• How will we raise money? If you'll rely on foundation grants or donors who want a tax deduction, you'll almost certainly need a 501(c)(3).
• Do we want to support or oppose candidates? A 501(c)(3) can never do this. If it's central to your plans, you need a different structure, and a lawyer.
• How much will we lobby? Some lobbying fits in a 501(c)(3). If it will be most of what you do, a 501(c)(4) may fit better.
• Can we handle the paperwork? A 501(c)(4) has its own 60-day notice and filings, and two groups means double the work.

The structure chooser walks through these trade-offs, and our legal basics guide explains where to find free or low-cost legal help.

Your 501(c)(3) or 501(c)(4) checklist

• We've written down our main activity in one sentence
• We know whether our donors and funders need gifts to be tax-deductible
• We know a 501(c)(3) may never support or oppose a candidate
• We've estimated how much of our work will be lobbying
• If we form a 501(c)(4), we've put the Form 8976 deadline (60 days after forming) on the calendar
• If we run two groups, each has its own EIN, bank account and records, and we share costs fairly
• We've asked a lawyer to review our plans before any election-related work