515 Broadway • Chesterton, IN 46304  Phone: (219) 926-8135  Email:sphilbrick@legal-talk.com

Charitable Organizations

I have dedicated my practice to serving the legal needs of the residents of Northwest Indiana: Porter County, Lake County, LaPorte County, and the surrounding communities.

  • Non profit organizations
  • 501(c) organizations

  • DISCLAIMER: This site and information contained herein are intended for informational purposes only and should not be construed as legal advice.  Seek competent legal counsel for advice on any legal matter.

    Non Profit Organizations 
  • A nonprofit organization's purpose is to engage in activities which do not provide financial profit to the benefit of its members.  That is, it uses surplus revenues to achieve its goals rather than distributing them as profit or dividends.  Whole non profit organizations are permitted to general surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans.  It is formed under State law and it obtains tax exempt status from the IRS and Indian Department of Revene to be free from certain tax burdens.

  • 501(c) Organizations 
    Section 501(c) of the United States Internal Revenue Code (26 U.S.C. Section 501(c)) provides that 28 types of nonprofit organizations are exempt from some federal income taxes.  Section 503 through 505 set out the requirements of attaining such exemptions.  Many States refer to Section 501(c) for definitions of organizations exempt from State taxation as well.

  • The most well-known is the 501(c)(3) organization which is organized and operated exclusively for religious. charitable, scientific, testing for public safety, literary or educational purposes to foster national or international amateur sports competition, to promote the arts, or for the prevention of cruelty to children or animals.  The reason this organization is well known is because Section 170 of the Internal Revenue Code (26 U.S.C. Section 170) provides a deduction, for federal income tax purposes, for some donors who make  charitable contributions to most types of 501(c)(3) organizations.

  • There are two types of 501(c)(3) organizations: a public charity and a private foundation.  A public charity normally receives a substantial part of its income, directly or indirectly, from the general public or from the government. The public support must be fairly broad, not limited to a few individuals or families.  Examples would be the American Red Cross or United Way.

  • a private foundation, on the other hand, receives most of its income from a few individuals or from endowments and investments.  Typically, a private foundation makes grants to other organizations, rather than being disburse directly for charitable activities.

  • One significant difference between a public charity and a private foundation is the deductibility for federal income tax purposes of contributions to a private foundation versus a public charity.  More income can be deducted if the donation is made to a public charity rather than to a private foundation.