Please be aware that while these terms are often used interchangebly, they do not mean the same thing.
- Nonprofit means the entity, usually a corporation, is organized for a nonprofit purpose. The organization serves some public purpose and therefore enjoys special treatment under the law. Nonprofit corporations, contrary to their name, can make a profit but can’t be designed primarily for profit-making.
- 501(c)(3) means a nonprofit organization that has been recognized by the IRS as being tax-exempt by virtue of its charitable programs. (Find out more on how to establish a 501(c)3.)
- Tax-exemption is the result of a nonprofit organization being recognized by the IRS as being organized for any purpose allowable under 501(c)(3) – 501(c)(27).
(Aplos is a fund accounting software designed specifically with this terminology in mind.)