ACA Not-For-Profit


The Arden Community Association is categorized by the IRS as a tax-exempt social welfare organization that is organized not-for-profit and must be operated exclusively to promote social welfare, and primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements).

Facts about a 501(c)4:

The most obvious (and important) benefit of becoming a 501(c)(4) organization is the tax-exempt status. Avoiding a tax obligation will helps the organization grow faster and better serve the community as a not-for-profit entity.

501(c)(4) organizations rely on support from individuals (residents), in the form of large and small contributions.

501(c)(4) requires that organizations operate primarily in promoting in some way the common good and general welfare of the people of the community.

Contributions to civic leagues or other section 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer's business.

501(c)(4) organizations may engage in political campaigns on behalf of or in opposition to candidates for public office provided that such intervention does not constitute the organization's primary activity. The 501(c)4 organization cannot stand in support of or against any politician, whether done indirectly or directly. However, the 501(c)4 is allowed to partake in minimal political activity, but those activities cannot become the focus of the organization.

The Internal Revenue Service (IRS) requires that all nonprofits registered at the federal level maintain a minimum of three members on the board of directors.

To qualify and maintain 501(c)4 status, an organization can't spend more than half of their funds on political-related things. The technical majority of their spending (50.1 percent) needs to be focused on social welfare projects within their chosen locations.