What term is commonly used to refer to nonprofit, tax-exempt organizations?

The term "501(c)(3)" specifically refers to a category of nonprofit organizations that are eligible for tax-exempt status under the internal revenue code in the United States. This designation allows these organizations to operate free from federal income tax and qualifies them to receive charitable donations that are tax-deductible for the donors. 501(c)(3) organizations are typically established for purposes such as charitable, religious, educational, scientific, or literary missions.

This classification is significant because it allows organizations to pursue their missions without the burden of certain taxes and encourages public support through tax-deductible contributions. This status is prominent and widely recognized, making it a clear reference point when discussing nonprofit organizations focused on the greater good.

The other options, while they relate to nonprofit entities, do not accurately capture the tax-exempt status associated with the most common nonprofit designation. For example, 501(c)(6) refers to trade associations which do not qualify for the same level of tax-deductibility for contributions. Non-Governmental Organizations (NGOs) is a broader term that encompasses various types of organizations (for-profit and nonprofit) that operate independently from the government, and "Public Charity" refers to a specific type of 501(c)(3) but is