A nonprofit organization might choose to file as 501c4 if it wishes to engage in political lobbying or if it does not qualify for 501c3 status because of political activities. Unlike 501c3s, contributions to 501c4s are not tax-deductible, making them less attractive to donors who wish to save money on their taxes.

For example, MoveOn.org – a progressive online advocacy group initially registered as a 501c3 – wanted to lobby Congress freely and run ads for and against certain political candidates, so they registered a separate 501c4 organization and eventually phased out the 501c3 arm of the organization.

Tags: 501c4, nonprofits, tax deductions