Charities Law & Legal Definition

The term "charitable organization", in a legal sense, is an organization exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code. Included in such exempt status are corporations and other organizations organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, or to foster certain amateur sports competitions, or for the prevention of cruelty to children or animals. Also,  no part of the net earnings of the organization can benefit a private shareholder or individual, nor can any substantial part of the activities involve the carrying on of propaganda, participating in a political campaign on behalf of any candidate for public office, or otherwise attempting to influence legislation except as otherwise provided by the Internal Revenue Code.

"Charitable purposes" may include helping the poor and distressed or the underprivileged, advancement of religion, education or science, erection or maintenance of public buildings, monuments or works, lessening of the burdens of government, eliminating prejudice and discrimination, defending human and civil rights secured by law, or combatting community deterioration and juvenile delinquency. 

Contributions to charitable organizations are generally deductible for purposes of the donor's income, gift, and estate taxes. Charitable organizations that qualify for the federal exemption are also usually exempt from income and other state taxes.