Why is it generally better for individuals to donate to 501(c)(4) organizations than to (c)(3)’s? I’m deeply ignorant in this space, so it’s a genuine question.
My super naive read is that c3’s are tax deductible (which is nice), presumably you think there is more than a 50% bonus in effectiveness of c4′s?
Not necessarily. It’s more that funding gaps of c3′s can be more easily filled by big foundations (which are also c3′s), whereas donations from c3′s to c4′s are restricted. That makes it more valuable, ceteris paribus, for individuals to fill c4 funding gaps.
Also, the “50% bonus” only applies if you itemize deductions; many people use the standard deduction, including some people who earn more than six figures.
Why is it generally better for individuals to donate to 501(c)(4) organizations than to (c)(3)’s? I’m deeply ignorant in this space, so it’s a genuine question.
My super naive read is that c3’s are tax deductible (which is nice), presumably you think there is more than a 50% bonus in effectiveness of c4′s?
Not necessarily. It’s more that funding gaps of c3′s can be more easily filled by big foundations (which are also c3′s), whereas donations from c3′s to c4′s are restricted. That makes it more valuable, ceteris paribus, for individuals to fill c4 funding gaps.
Also, the “50% bonus” only applies if you itemize deductions; many people use the standard deduction, including some people who earn more than six figures.
Makes sense, thanks!