501(c): (3) versus (6)
501(c) organizations are US non profit organizations. 501(c) is actually the name of the IRS tax code that defines non profits.
There are actually 28 kinds of 501(c)‘s. I’ll focus here on just two:
They are both nonprofits, exempt from federal income tax.
Here are some of the main differences: (Note that I am not an attorney nor an accountant, so you should consult other experts if you are actually creating one of these organizations!)
|501(c) (3)||501(c) (6)|
|Benefit to the public.||Trade organization or group of professionals with related business interests. Benefit to the organizations members.|
|Donations are tax deductible.||Membership dues are a business expense, but donations are not tax deductible.|
|Very limited political lobbying allowed.||Any amount of political lobbying that is related to member interests.|
|Eligible for grants.||Not eligible for grants.|
|Must limit activities to specified cause.||Members must have common business interest.|
The GNOME Foundation is a 501(3)(c) that supports “the goal of the GNOME project: to create a computing platform for use by the general public that is completely free software.” The GNOME Foundation is supported in its mission by many individuals and companies.