The chart below compares seven federal tax law attributes of five common types of tax-exempt organizations. Federal tax law attributes of five common types of tax-exempt organizations 501(c)(3) 501(c)(4) 501(c)(5) 501(c)(6) 527 Receive tax-deductible charitable contributions YES NO NO NO NO Receive contributions or fees deductible as a business expense YES YES YES YES NO Substantially related income exempt from federal income tax YES YES YES YES YES Investment income exempt from federal income tax LTD* YES YES YES NO Engage in legislative advocacy LTD YES YES YES LTD Engage in candidate election advocacy NO LTD LTD LTD YES Engage in public advocacy not related to legislation or election of candidates YES YES YES YES LTD *Private foundations are subject to tax on their net investment income. Interactive Training Learn more about the benefits, limitations and expectations of tax-exempt organizations by attending 10 courses at the online Small to Mid-Size Tax Exempt Organization Workshop.
