A nonprofit tax exemption allows organizations that operate for charitable, educational, or social purposes to avoid paying certain taxes. This status is typically granted by the Internal Revenue Service (IRS) in the United States, enabling nonprofits to focus their resources on their missions rather than on tax liabilities. To qualify for this exemption, nonprofits must meet specific criteria, including being organized as a 501(c)(3) entity. This designation ensures that donations made to these organizations are tax-deductible for the donors, encouraging public support and funding for various causes.