What is a 501(c)(3) Nonprofit?
501(c)(3) Nonprofit
In the arts industry, a common level of incorporation you may come across is a 501(c)3 not-for-profit. Under this incorporation, the nonprofit organization uses the surplus of their revenue to fulfill the entity’s mission rather than distributing as profit or dividends to shareholders. Being “501(c)(3)” means that a particular nonprofit organization has been approved by the Internal Revenue Service as a tax-exempt, charitable organization. The term “charitable” includes being established for purposes that are religious, educational, charitable, scientific, literary, testing for public safety, fostering national or international amateur sports, or prevention of cruelty to animals and children. The process of formation as a 501(c)3 involves many documents and registrations through a lawyer, as well as awaiting IRS approval which all incur fees. As required by articles and by laws, the 501(c)3 must also establish a board of directors and maintain annual audits.
NEXTSTEPS | 11.16.20
Latest Blog Posts
Fundraising Q&A: Planning a Fundraising Event
Q&A: Planning a Performing Arts Fundraising EventEvent Fundraising in the Performing Arts can be a Great Way to Raise Funds There are a number of ways to fundraise money for a performing arts organization or cause. One of the most collaborative ways to fundraise...
Crowdfunding Versus Fundraising
Crowdfunding versus FundraisingWhat is the difference between Crowdfunding and Fundraising? Crowdfunding is exclusively online while fundraising could be either in person or virtual. The majority of Crowdfunding websites make it free to begin so you retain most of the...
What is a C Corp?
What is a C-Corp?What is a C-Corp, and how does it differ from other types of corporate structures? A C corporation (C corp) is defined as a legal business entity that is taxed separately from its owners or shareholders. This includes performing arts entities. Often...