501(c)(3) organization
In accounting, 501(c)(3) organization means a nonprofit organized and operated exclusively for the exempt purposes section 501(c)(3) names — charitable, educational, religious, literary, scientific and the like — none of whose earnings may benefit a private shareholder or individual. It has no owners and no equity to sell.
Authority: IRS — Exemption requirements, 501(c)(3) (opens in a new tab). Sources
The lesson that teaches this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- nonprofit unqualified (a state-law status; not every nonprofit is exempt under 501(c)(3))
Components that render the terms it depends on
No component names this concept outright, but it's built from terms that components do name. These render equity.
Also in Entity types
Defined in Lexicon. This page is generated from that document, so the two can't disagree.