Nonprofit Institution [Education] Law and Legal Definition

According to 34 CFR 12.2 [Title 34 – Education; Subtitle A -- Office of the Secretary, Department of Education; Part 12 -- Disposal and Utilization of Surplus Federal Real Property for Educational Purposes; Subpart A – General], the term nonprofit institution means “any institution, organization, or association, whether incorporated or unincorporated--

(1) The net earnings of which do not inure or may not lawfully inure to the benefit of any private shareholder or individual; and

(2) That has been determined by the Internal Revenue Service to be tax-exempt under section 501(c)(3) of title 26.”

According to 34 CFR 600.2 [Title 34 – Education; Subtitle B -- Regulations of the Offices of the Department of Education; Chapter VI -- Office of Postsecondary Education, Department of Education; Part 600 -- Institutional Eligibility under the Higher Education Act of 1965, as Amended; Subpart A – General], the term nonprofit institution is “an institution that --

(1) Is owned and operated by one or more nonprofit corporations or associations, no part of the net earnings of which benefits any private shareholder or individual;

(2) Is legally authorized to operate as a nonprofit organization by each State in which it is physically located; and

(3) Is determined by the U.S. Internal Revenue Service to be an organization to which contributions are tax-deductible in accordance with section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)).”