Private Benefit/Inurement

Private benefit and inurement are closely related concepts.

Let’s look at private benefit first. 501(c)(3)s must avoid all activities that will benefit substantially the private interest of any individual or organization. Instead, the
501(c)(3)’s activities must serve a public interest.
           
This does not mean that a 501(c)(3) cannot pay reasonable salaries to its employees, or provide services to its constituents. It does mean that the organization cannot be operated to provide a substantial private benefit to someone.