Sherry – just to be sure you have good language on the difference between the two I have pasted it below. I suggest you consult with Sheryl (when she returns from vacation) to be sure that your decision fits within the DD Act and your Council bylaws. The important part here is that there are some things a c4 can do that a c3 cannot such as give money to candidates (which is why some groups go that route) and they can spend more money on lobbying. Be clear in knowing that both a c3 and a c4 can lobby. For example, NACDD is a c3 and we are registered to lobby which means we tell Congress and the IRS our intent to lobby but keep our spending below the 20% threshold and discussed below. The main question to first ask the A-Team is what do they plan to do as a c4? Is it for the purpose of backing candidates that speak up for disability issues? Then ask does that fit with the DD Council mission and will they be speaking to the same legislative issues. We are happy to help you think this through and make a sound decision.

Donna

According to the Internal Revenue Service Code, 501(c)(3) and 501(c)(4) organizations are nonprofit organizations that are exempt from paying federal income tax. 501(c)(3) organizations are either a public charity, private foundation or private operating foundation with open membership whereas 501(c)(4) organizations are civic leagues or associations operated exclusively for the promotion of social welfare or local associations of employees with limited membership.

When it comes to lobbying and political activity, 501(c)(3) organizations can appeal directly to legislative bodies and representatives and may support issue-based legislation. However, they must notify the IRS of their intent to lobby by filing form 5768, which formally informs the federal government that one has elected to use the expenditure test to have the organization's lobbying activity measured. Under this test, lobbying capacity is typically limited to spending less than 5 to 20% of the organizational budget on lobbying activities, depending on the size of your organization.

501(c)(4) organizations can engage in unlimited lobbying so long as it pertains to the organization's mission. 501(c)(3) organizations are not permitted to engage in political activity, endorse or oppose political candidates, or donate money or time to political campaigns, but 501(c)(4) organizations can do all of the above.

In regards to supporting these organizations, donations made to 501(c)(3) organizations are deductible to the full extent of the law as charitable contributions. Donations made to 501(c)(4) organizations are not deductible, though some businesses who make these contributions often write them off as advertising or business expenses. (Please consult your accountant.)