Abstract: This Article discusses the justification for income tax exemption for organizations qualifying under § 501(c)(4). It explores why these organizations are entitled to exemption on their entire income though they are deemed unworthy of the charitable contribution deduction. The Article notes that income tax exemption generally only benefits entities that accumulate funds and points out that the subsidy from income tax exemption for long term accumulation can exceed the benefit of the charitable deduction. It concludes that full income tax exemption under § 501(c)(4) cannot be justified either on the grounds that it is relatively unimportant or by analogy to the treatment of mutual organizations, whose exemption has been circumscribed. However, exemption for income from performance of services related to the exempt purpose and for a limited amount of investment income may be appropriate in some circumstances.