Image courtesy of user "angiechaoticcrooks" on Pixabay.com

Image courtesy of user “angiechaoticcrooks” on Pixabay.com

The question posed in the title is one of the most common search engine terms on this website. Sometimes the question is about 501(c)(4), sometimes 501(c)(7) and sometimes it’s about some other type of “501(c)” organization.

Background: What Are 501(c) Organizations?

Whenever you hear about an organization that’s a 501(c)”something” it’s referring to a tax-exempt organization.

For more background info, check out some of the posts I’ve written in the past:

Tax-Exempt Organizations and Deductions

When a person gives money to a tax-exempt organization, the donation may or may not be tax deductible. Here are the basic rules:

  • If the organization is a 501(c)(3), the donation is deductible as a charitable contribution
  • For other types of 501(c) organizations, the donation is generally not tax deductible, but there are exceptions

Those exceptions for donations to other types of 501(c) organizations would generally apply to businesses, not individuals.

For example, if a business gives money to a 501(c)(4), and the business gets advertising in return for the donation, the business could take a deduction for a marketing expense.

For individuals who are giving money to an organization other than a 501(c)(3), it’s hard for me to envision a scenario where the donation would be tax deductible.

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”