Prepare articles of organisation against the section 501(c)(3) organisational test

Key facts

Human involvement

Red · Lawyer-led

How AI is used

List each purpose in the draft articles and whether the regulation's organisational test, as opened, asks a question about that purpose, about non-exempt powers, about campaign activity, or about assets on dissolution. Write no article.

What the lawyer must review

You write the articles. Treasury Regulation § 1.501(c)(3)-1(a) requires an organisation to be both organised and operated exclusively for one or more of the purposes in section 501(c)(3). Under paragraph (b), the articles meet the organisational test only if they limit the organisation to exempt purposes, do not expressly empower it to carry on, otherwise than as an insubstantial part, activities that are not in furtherance of an exempt purpose, and do not state purposes broader than section 501(c)(3). Actual operations that happen to be exempt do not cure articles that fail the test. The articles must not expressly empower the organisation to devote more than an insubstantial part of its activities to influencing legislation, or to participate or intervene in a political campaign for or against a candidate, subject to the section 501(h) election described in the regulation. Assets must be dedicated to an exempt purpose. Dedication may be shown if, on dissolution, assets would by the articles or by operation of law go to an exempt purpose, to the federal government, or to a state or local government for a public purpose, or be distributed by a court for the dissolved organisation's general purposes. The organisational test is not met if the articles or the law of the state of creation distribute assets on dissolution to members or shareholders. The law of the state of creation controls the meaning of the articles. You choose the state form. No state nonprofit statute was opened.

Written for / version

United States versionUS