Which 501(c) Type is Right for You?
Answer a few questions to find the best tax-exempt status for your organization.
What is the primary purpose of your organization?
Will donors need tax deductions for their contributions?
Will your organization engage in political activities?
Who will benefit from your organization?
How will members join your club?
501(c)(3) - Charitable Organization
This is the most common nonprofit designation for charitable purposes.
- Donations are tax-deductible for donors
- Exempt from federal income tax
- May be eligible for grants
- Must file Form 1023 or 1023-EZ with IRS
501(c)(4) - Social Welfare Organization
Ideal for civic leagues and organizations promoting social welfare.
- Can engage in limited political activity
- Exempt from federal income tax
- Donations are NOT tax-deductible
- Must file Form 1024-A with IRS
501(c)(6) - Business League
Perfect for trade associations, chambers of commerce, and professional groups.
- Promotes common business interests
- Exempt from federal income tax
- Dues may be deductible as business expense
- Must file Form 1024 with IRS
501(c)(7) - Social Club
Designed for clubs organized for pleasure, recreation, and social activities.
- Members must have personal contact
- Exempt from federal income tax
- Limited outside income allowed
- Must file Form 1024 with IRS
Consider a Different Structure
Based on your answers, a 501(c)(7) social club may not be the best fit.
501(c)(7) organizations require members to have personal contact with each other. If membership is open to anyone, consider:
- 501(c)(3) if your activities are charitable or educational
- 501(c)(4) if you're focused on community welfare
- For-profit LLC if activities are primarily commercial