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

 

Related Blog Posts

Investing during COVID-19 FAQ

Investing during COVID-19 FAQ

Investing during COVID-19 FAQ Tips for Maintaing Good Financial Health as an Artist A market downturn might feel like a strange time to be thinking about your investments, but there are critical steps you can take to maintaining good financial health as an artist with...

Pentacle’s nextSteps is supported, in part, by public funds from the National Endowment for the Arts, the New York State Council on the Arts with the support of Governor Andrew M. Cuomo and the New York State Legislature, and the New York City Department of Cultural Affairs in partnership with the City Council. Pentacle receives private support for nextSteps from the Rockefeller Brothers Fund and The Howard Gilman Foundation.

NYSC logo
NYSCA logo
Rockefeller Brothers Fund

Howard Gilman Foundation logo

Share This