Nonprofit organizations are typically founded with no intention of making a profit; instead, they prioritize delivering a public good or service. They also can take many different forms. You can establish a nonprofit organization as a corporation, limited liability company (LLC), foundation, trust, or even an unincorporated association, depending on your requirements.
What Are the Different Kinds of Non Profit Organizations?
What is a not-for-profit organization?
An organization is considered to be not-for-profit if all of the funds it receives are reinvested to further its goals and objectives rather than being distributed to its owners as profits. The majority of not-for-profit organizations are exempt from paying taxes and frequently rely on donations from the public to finance their operations. Most not-for-profit organizations are established to serve one or more social purposes, as opposed to for-profit ones, which can have a variety of purposes.
Types of not-for-profit organizations
Some of the most typical kinds of not-for-profit organizations include:
Charitable organizations
In the United States, there are almost a million registered charitable organizations. They are registered with the IRS under tax code 501 (c)(4), just like educational, scientific, religious, and literary organizations, and any donations to them are tax-deductible. There are many different kinds of charitable organizations, but the ones that work to end hunger, educate various demographic groups, care for animals, support amateur sports, and provide low-income housing are the most well-liked.
Social advocacy groups
Social advocacy organizations, which fall under code 501(c)(4), support a range of social or political initiatives. Typically, they plan fundraising events to raise money for the causes they support, and they use the money they raise to inform the public and lobby political organizations on behalf of those causes.
Foundations
Foundations are nonprofit organizations that raise funds to support other nonprofits and other social causes, such as educational initiatives and campaigns to raise public awareness of various social problems. The majority of foundations are created by wealthy organizations and individuals, and to maintain their status, they are required to donate a certain percentage of their income. Additionally, they are prohibited from engaging in any direct political activity despite being permitted to support a variety of organizations that engage in political lobbying.
Civil leagues, social welfare organizations and local employee associations
In contrast to foundations, these three categories of not-for-profit organizations fall under the 501(c)(4) classification and are subject to fewer restrictions on political lobbying. Their primary objective is typically to offer assistance and support to people or groups who are struggling, but they also want to protect the wellbeing of their own members.
Trade and professional associations
These businesses are generally operated solely for the purpose of enhancing the business environment for their own members and are classified under code 501(c)(6). They accomplish this by offering opportunities for education and employment, as well as by lobbying politicians. Chambers of commerce, business leagues, unions, and real estate boards are some of the trade and professional associations that are most frequently encountered.
Social and recreational clubs
These organizations, which are tax-exempt under section 501(c)(7), exist to plan different leisure activities so that their members can interact and have fun. This category includes organizations like country clubs and sports leagues.
Fraternal societies
These organizations, which fall under the 501(c)(8) classification, were established to support the growth and education of their members as well as to assist them in a variety of trying circumstances. Organizations that want this status must give members a promise that they will be helped if they ever need it.
Employee beneficiary associations
These organizations, which are registered under code 501(c)(9), bring together experts employed by the same company or union members and offer them financial assistance in the event of unfortunate occurrences, such as accidents or illnesses.
Domestic fraternal societies and associations
Unlike fraternal societies, these organizations are registered under 501(c)(10), and instead of being founded to assist their own members, they use membership fees to support a variety of outside causes.
Teachers retirement fund associations
501(c)(11) non-profit organizations are in charge of overseeing teacher pension plans. The majority of the time, local taxes, investment income, and membership fees are used to fund them.
Cemetery companies
These businesses only exist to provide their members with respectable burial services and are code 501(c)(13)-filed.
State-chartered credit unions and mutual reserve funds
These organizations, which operate as financial institutions and have the 501(c)(14) code, provide services to their members and to local communities at costs that are typically lower than those of comparable for-profit organizations. They are usually funded by government grants.
Mutual insurance companies of association
These organizations, which are classified as 501(c)(15), offer insurance to their members for a variety of things like property damage or funeral expenses.
Cooperative organizations to finance crop operations
Their 501(c)(16) filing states that they are responsible for financing crop operations. Typically, they are made up of groups of farmers who combine their resources in order to improve their farming operations.
Supplemental unemployment benefits trusts
These nonprofit organizations, which carry the 501(c)(17) designation, offer financial assistance to a range of people who are either permanently or temporarily jobless. Paying members typically have priority when they need financial assistance because these trusts are typically funded by monthly member fees.
Employee funded pension trusts
For pension funds that were directly established by employees and were established before June 25, 1959, use the 501(c)(18) code.
Veterans organizations
For organizations with 75% or more members who are active-duty or retired members of the armed forces, use the 501(c)(19) code. They are supported by donations and offer a range of assistance to their members. Additionally, there is a distinct code, 501(c)(23), set aside for veteran organizations founded prior to 1880.
Black lung benefits trust
These organizations, which have 501(c)(21) tax-exempt status, are charged with helping coal miners who experience serious medical problems as a result of their work in mines.
State-sponsored organizations providing health coverage for high-risk individuals
These non-profit organizations, which have the 501(c)(26) code, offer health insurance to various high-risk individuals who are unable to obtain adequate coverage for a variety of reasons. Government grants and donations provide the majority of the funding for these organizations, and the majority of their beneficiaries are people with serious health risks and preexisting conditions.
Religious and apostolic associations
These organizations have a common treasury where all of the member income is combined and are registered under code 501(d). They are not prohibited from participating in politics, and donations made to them are not tax-deductible.
Cooperative hospital service organizations
Hospitals are frequently 501(e) not-for-profit organizations that consider different types of joint ventures with other hospitals for the benefit of both institutions’ patients. They receive most of their funding through tax-exempt donations.
FAQ
What are the 4 types of non profit organizations?
Information on the various types of nonprofit organizations is provided in IRS Form 557. Common examples of nonprofit organizations include public charities, foundations, social advocacy organizations, and trade associations.
What are the 3 types of non profits?
There are three main types of charitable organizations: public charities, private foundations, and private operating foundations. The majority of organizations are eligible to fall under one of these three categories.
What are the different categories of nonprofits?
There are three main types of charitable organizations: public charities, private foundations, and private operating foundations. The majority of organizations are eligible to fall under one of these three categories.
What are the 29 types of nonprofit organizations?
There are three main types of charitable organizations: public charities, private foundations, and private operating foundations. The majority of organizations are eligible to fall under one of these three categories.
