What is an educational 501(c)(3)?
To qualify as “educational,” an organization does not necessarily have to provide what many may think of as traditional, classroom-style instruction.
A nonprofit organization may qualify as an educational 501(c)(3) so long as the intent is to provide individuals or the public with fact-based instruction on ideas or materials that may aid in better decision making or improvement on an individual or community level.
More specifically, under Internal Revenue Service Treasury Regulations §1.501(c)(3)-1(d)(3), the term “educational” refers to instruction or training of:
- An individual for the purpose of improving or developing their capabilities; or
- The public on subjects useful to individuals and beneficial to the community.
An organization may provide general educational instruction to an underserved sector or focused instruction in a specific area. Examples of concentrations may include:
- Global warming
- Liberal or conservative policy
- Urban development
- Native plant preservation
Propagating a position or opinion without sound or depth of fact to incite an emotional response is propaganda and will not qualify as educational. However, an organization may promote a specific viewpoint so long as its audience is provided with a sufficient scope of evidence that reasonably allows them to reach their own conclusions.
The IRS may test whether an organization qualifies as educational as described in section 501(c)(3) of the Internal Revenue Code and section 1.501(c)(3)-1(d)(3) of the Treasury Regulations by auditing the organization’s materials. The organization will not be considered educational if it fails to provide:
- A factual foundation for the viewpoint or position being advocated; or
- A development from the relevant facts that would materially aid a listener or reader in a learning process.
The following factors are further evidence that an organization is not educational:
- The presentation of viewpoints or positions unsupported by facts is a significant portion of the organization’s communications;
- The facts that purport to support the viewpoints or positions are distorted;
- The organization’s presentations make substantial use of inflammatory and disparaging terms and express conclusions more based on strong emotional feelings than of objective evaluations; and
- The approach used in the organization’s presentations is not aimed at developing an understanding on the part of the intended audience or readership because it does not consider their background or training in the subject matter.
In other words, an organization’s viewpoint must be based on accurate, unbiased facts and presented objectively to its intended audience in a manner consistent with its audience’s capacity to understand, absorb, and act on the information.
The IRS conducts its review dispassionately, even if the viewpoint advocated for is “unpopular” or “not generally accepted.” So long as the organization adheres to the criteria outlined in section 501(c)(3) of the Internal Revenue Code and 1.501(c)(3)-1(d)(3) of the Treasury Regulations, the organization may be considered an educational nonprofit.
For guidance on the nuances of nonprofit regulations, contact our seasoned legal team at LFNP – The Law Firm for Non-Profits. For over 30 years, our attorneys have helped fledgling to well-established nonprofits navigate everything from entity formation to complex business transactions, corporate governance, IRS and Attorney General audits, and strategic growth.