Q:

What qualifies a group as a "charitable organization?"?

A:

Quick Answer

Charitable organizations in the United States are those that meet Internal Revenue Service requirements relating to their purpose and nonprofit status. To qualify as charitable, organizations must also register with state government, file for tax-exempt status and refrain from any lobbying activities.

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Full Answer

Prior to consideration by the IRS for recognition as a charitable organization, an organization must register with and be recognized as a nonprofit organization by its state government. In its articles of incorporation, a charitable organization must permanently and exclusively defins its primary purpose and activities as consistent with Section 501(c)3 of the Internal Revenue Code. Charitable purposes, as defined by the IRS, range from services to the poor; the advancement of religion, education or science; building and maintaining public structures; and reducing prejudice, discrimination and juvenile delinquency to defending human and civil rights.

A nonprofit, charitable organization pays employees, but must not provide funds to any individual that has control or influence over its activities. Charitable organizations may not engage in any significant activity to influence legislation or participate in political campaigns. The IRS requires organizations applying for charitable status to submit financial records for the prior year and budgets for the next two years.

Contributions to organizations recognized as charitable by the IRS are tax exempt.

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