A Guide to the Main Types of Not-For-Profit Organizations

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There are five categories of nonprofits, including charitable, religious and church, private foundations and political organizations. Some types of nonprofits fall under miscellaneous, such as Federal Credit Unions. Within these categories, there are dozens of 501 tax-exempt statuses. In this guide, we walk you through 32 types of nonprofits, how to choose the right one for your organization and frequently asked questions you may be asking.

Not-for-profit organizations also known as nonprofits or NPOs, are entities that exist to achieve a mission for public benefit rather than generating profit. There are over 1.5 million nonprofits registered in the United States alone, contributing nearly $1 trillion to the economy annually.

These organizations address diverse causes in areas like health, education, environment, arts, and social services. They take on a variety of legal structures and serve communities at local, national and global scales.

This article will provide an overview of the major categories of not-for-profit organizations. Understanding the landscape of nonprofits can help individuals find opportunities to give back through volunteering or donations. It can also help entrepreneurs pick the right structure when establishing a new organization.

What Defines a Nonprofit Organization?

Not-for-profit organizations differ from for-profit businesses in their purpose, structure and use of revenue. The key characteristics of nonprofits include:

Mission-driven – They exist to further a social, cultural, educational or public benefit mission, rather than seeking profit
Tax-exempt – Most are exempt from paying certain federal state and local taxes. Donors can deduct contributions from their taxes.
Reinvest revenue – Earnings get reinvested into operations rather than distributing profits to owners or shareholders.
Volunteer involvement – They often rely on volunteers for governance, operations and service delivery.

While nonprofits aim to operate sustainably, fulfilling their purpose takes priority over generating revenue. Their success is measured by societal impact rather than financial returns.

Types of Nonprofit Organizations

There are many diverse categories and structures under the nonprofit umbrella. The following are some of the major types of tax-exempt organizations recognized by the IRS:

Charitable Organizations

Charitable nonprofits focus on providing relief to the poor, advancing religion, education, science or health, and other social benefit activities. Examples include food banks, youth programs, religious institutions, museums, disease research foundations and animal welfare groups.

Charitable nonprofits are the most common type of 501(c)(3) tax-exempt organizations. Donors can deduct contributions from their taxes. These nonprofits must avoid political campaigning and lobbying as a substantial part of their activities.

Social Advocacy Groups

These nonprofits seek to advance social or political causes through public education, activism, lobbying and promoting specific viewpoints. Examples range from environmental groups like the Sierra Club to conservative organizations like the National Rifle Association.

Many social advocacy nonprofits are 501(c)(4) organizations. Donations are not tax deductible, but there are fewer restrictions on lobbying efforts.

Foundations

Foundations are nonprofits established with an endowment from an individual, family or corporation to make grants supporting charitable, educational, religious or other exempt purposes. Community foundations, corporate foundations and private family foundations are common examples.

Most foundations pursue granting activities rather than direct service delivery. Their organizational and tax structure varies based on their purpose and source of funding. Some exceptions like company-sponsored foundations may not qualify for tax exemption.

Civil Leagues and Social Welfare Groups

Civil leagues promote community improvement, education and charitable service in their local areas. This could include neighborhood associations, community centers, youth sports leagues and similar groups.

Related social welfare organizations work to better conditions for specific groups, such as minority rights organizations. Both types are tax-exempt under 501(c)(4) but donations are not tax deductible.

Trade and Professional Associations

Associations exist to advance a particular profession, industry or field of study through networking, education, career development and public awareness. Well-known examples include the American Medical Association, American Bar Association and various technical associations.

Most associations qualify as 501(c)(6) tax-exempt organizations. Some like bar associations regulate licensing and professional standards. Associations may restrict membership to specific qualifications.

Social and Recreational Clubs

These nonprofits focus on bringing together individuals around shared interests, activities or culture. Examples include country clubs, sporting organizations, arts clubs, hobbyist groups, alumni societies and more.

Social and recreation clubs may qualify under 501(c)(7) exemption. Requirements like member dues and specific activities define their structure and tax status.

Fraternal Societies

Fraternal societies work to improve members’ quality of life through social activities, volunteer service, member insurance and mutual aid programs. Major examples include the Elks, Masons, Knights of Columbus and other lodges.

They operate as 501(c)(8) or 501(c)(10) tax-exempt organizations with restrictions on membership criteria and involvement in insurance activities.

Employee Beneficiary Associations

These groups promote the welfare of members who share an employment-related bond. Teacher organizations, police and firefighter associations fall into this category.

Most qualify for tax-exempt status under 501(c)(9) criteria, with member dues funding benefits like life insurance, medical plans or pensions.

Starting a Nonprofit Organization

If you want to establish a new nonprofit, first determine which category best fits your mission. Factor in the tax status implications in your state.

Typical steps to start a nonprofit organization include:

Name and register your organization
File for tax-exempt status with the IRS
Create bylaws, governance structure and operating procedures
Fundraise and develop a budget
Hire staff and enlist volunteers
Register with applicable state agencies
File annual tax returns and required disclosures

Getting advice from established nonprofits, legal/tax professionals and associations can guide you through the process.

The Role of Nonprofits in Society

As this overview illustrates, nonprofit organizations support nearly every imaginable public need, community interest and social cause. The diverse nonprofit sector provides vital services, drives progress on societal challenges, and represents the interests of varied groups and associations.

Nonprofits rely on volunteers donating their time and resources to fulfill their mission. Getting involved with a nonprofit aligned to your passions is a great way to give back to your community and make a difference.

Whether you want to advocate for something you believe in, bring people together around common interests, or address local needs, there is likely a nonprofit category that fits. Though they take many forms, nonprofits aim to make the world a little better. The breadth of the nonprofit sector reflects both the diversity of society and the shared desire to improve people’s lives.

types of not for profit organizations

501(c)(19), 501(c)(2: Veterans Organizations Before and After 1880

Veterans organizations in the United States either qualify for tax-exempt status as a 501(c)(19) or a 501(c)(23). A 501(c)(19) organization serves present and past war veterans. In contrast, a 501(c)(23) organization was created before 1880 and serves the same community for the purposes of providing insurance and other benefits to war veterans. These nonprofits can also be veterans auxiliary, foundations or trust organizations.

In both, 75% of its members must be past or present Armed Forces members. Spouses and family members can also be served via these organizations. Family members who served must not be farther removed than two degrees of consanguinity from the veteran member.

501(d): Religious and Apostolic Associations

Some religious communities are tax exempt if they share a common or community treasury. To fund the community treasury, the community or association must engage in a business for the common benefit of its members. To qualify for this status, the organization must document itself as a religious organization with members belonging to a church or church group. Entire pro rata shares must be disclosed on the tax filings of each community member.

5 Types Of Nonprofit Organizations – Blacks In Nonprofits

FAQ

What are the different types of 501c?

IRC Section	Types of Tax-Exempt Organizations
501(c)(2)	Title Holding Corporations for Exempt Organization
501(c)(4)	Civic Leagues and Social Welfare Organizations and Local Associations of Employees
501(c)(5)	Labor, Agricultural and Horticultural Organizations
501(c)(6)	Business Leagues, etc.

What are the different types of nonprofits?

Now that we have cleared up what a nonprofit is, we can move on to the list of nonprofit types. The IRS has granted federal tax exemption to a variety of nonprofits. These organizations range from public charities and private foundations to trade associations and pension funds.

How many types of nonprofit organizations are there?

(With 19 Types) A not-for-profit organization, also known as a nonprofit, is an organization or company that uses its earnings to invest in itself for its cause or employees. There are many types of nonprofit organizations, each distinguished based on elements like membership, structure and mission.

What are some examples of nonprofit organizations?

Examples include trade organizations, public charities, social advocacy groups, and foundations. Let’s go over some examples and then types so that you understand how to grow a nonprofit organization or set rules for lobbying and tax-deductible contributions. nonprofit organizations in the United States report revenue of $2.62 trillion.

Are all nonprofit organizations 501(c)(3)?

While all charities are nonprofit organizations, not all nonprofits are charities. The organizations we rate are 501 (c) (3) nonprofit organizations, commonly referred to as public charities. Below are all the different types of nonprofits in the U.S. and whether or not contributions are acceptable. Contributions allowable?