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Finance: What is a 501c3? 8 Views
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Description:
What is a 501c3? A 501c3 is an organization that is tax-exempt according to the IRS because they are considered to be a charitable or non-profit organization. Such organizations must apply for this designation and continue to follow certain rules in order to receive the perks of avoiding a variety of taxes. The most common 501c3 organizations are churches, charities like the Red Cross, schools, and organizations like Girl Scouts and Boy Scouts.
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Transcript
- 00:00
Finance a la shmoop... what is a 501c3.... well it's a charity people and it [Man discussing 501c3 charity]
- 00:11
sounds way cooler if you call it a number and with a letter than a number
- 00:15
right 501cPO...remember 007 yeah, way cooler than just
- 00:20
James right all right well 501c3 is the United States legal code number that
- 00:25
created space for federally tax-exempt charities that's a C there; C for
Full Transcript
- 00:31
charity and there are 29 flavors of charitable category that they addressed [Ice cream flavors]
- 00:35
now the government's working hard to catch up to baskin-robbins numbers but
- 00:38
they're not there yet specifically some of those 29 flavors [Girl given an ice cream cone]
- 00:42
include religious organizations, scientific literary or educational
- 00:47
charities, charities for amateur sports, testing for public safety kind of
- 00:53
charities yeah like the crash dummies charities involving cruelty to children [Woman on a swing with a child]
- 00:57
women and animals and yeah most of these are anti so why the special treatment
- 01:02
well if a 501c3 follows the many strict rules to maintain its nonprofit status
- 01:07
then donors giving money to it get to deduct that money right off the top when [Donor gives money to charity]
- 01:13
they're doing their taxes like if a tax payers paying 40 percent marginal tax
- 01:17
and they donate a dollar well that dollar only costs um 60 cents to donate
- 01:21
the US government essentially underwrites charitable donations at
- 01:25
least to a point like they forgive 40 cents of tax in that dollar and that's a
- 01:29
good thing we need noblesse oblige charities in the world they do good work
- 01:33
well most of them do.. [People standing behind charity stalls]
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