Charitable Organization

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A charitable organization is a nonprofit organization that seeks to advance some public benefit. Public benefit includes a broad range of areas such as education, poverty alleviation, scientific research, environment, diversity, religion, and health.  If an organization achieves 501(c)(3) status, individuals can deduct donations to the organization from their taxes. Some nonprofit organizations like unions, think tanks, or political organizations may be referred to as charitable organizations depending on the context. However, to achieve charity tax-exempt status, organizations cannot participate in many political activities under 501(c)(3) of the Federal tax code, and most political organizations and unions fall under other sections of the code. Tax-exempt 501(c)(3) organizations cannot actively promote any candidate or participate in an election in a biased-way. There are slim exceptions such as neutrally promoting voter registration. These organizations also can only participate in limited amounts of lobbying activities or face losing tax-exempt status. 

[Last updated in June of 2021 by the Wex Definitions Team]