Nonprofit 501(c)(3)
Organized for exempt purposes, owned by nobody: no equity, no exit, and earnings that may not benefit any private person.
A 501(c)(3) organization is a nonprofit organized and operated for exempt purposes, with none of its earnings going to any private shareholder or individual. It has no owners, so it has no equity: nothing to sell an investor, nothing to grant an employee, nothing for a founder to exit.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Background reading explains; it is never the authority for a rule. Anything marked as a convention is ours, not the rule-maker's.
- IRS guidance
- IRS, Exemption requirements — 501(c)(3) organizations (opens in a new tab)What a 501(c)(3) must beFree to read
- Federal agency guidance
- SBA, Choose a business structure (opens in a new tab)Choose a business structure — the SBA's overview of the optionsFree to read
- Background reading — not an authority
- Wikipedia, “501(c)(3) organization” (opens in a new tab)501(c)(3) organizationFree to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.