What is the exact difference between 501(c)(3) and 501(c)(4)?

 

As per IRS, 501(c)3 is a nonprofit organization for religious, charitable, scientific, and educational purposes. Donations to 501(c)3 are tax-deductible. Whereas on the other hand, 501(c)4 is a social welfare group, and donations to 501(c)4 are not tax-deductible.

 

Your HOA is a 501(c)(4). A 501(c)(4)  is a “social welfare group” that can advocate for causes and propositions, like 501(c)(3)s. Like any Section 501(c)(4) social welfare organization, a homeowners' association described under Section 501(c)(4) is required to be operated exclusively for the promotion of social welfare by primarily promoting the common good and general welfare of the people of the community. Homeowners associations by their very nature benefit certain individuals, typically their members. Weighing whether benefits flow primarily to the general public rather than certain individuals is an essential part of determining whether a homeowners' association qualifies for exemption as an IRC Section 501(c)(4) social welfare organization.

 

You can find additional information from the IRS on 501(c)(4) and HOAs here.