BlogOrganizational Management The Complete Guide to the 32 Types of Nonprofit Organizations + FAQ Organizational Management The Complete Guide to the 32 Types of Nonprofit Organizations + FAQ Author: Marlena Moore October 7, 2023 Contents 🕑 12 min read So you’re thinking about starting a nonprofit—a worthy cause, but one with a lot of up front research! As you study up on the ins and outs of nonprofits, you might find yourself scratching your head about the different types of nonprofit organizations out there. In this blog, we’ll break down: The 32 types of nonprofit organizations (in plain language!) An overview of 501(c)(3)s and tax exemption How to determine what type of nonprofit you are And more! What is a Nonprofit? A nonprofit is an organization that operates with the purpose of furthering a social cause. Crucially, these organizations are not allowed to make money for those who own them! Instead, their earnings go towards supporting their beneficiaries. To clarify: this doesn’t mean that nonprofits don’t make any money. It just means that the owners’ profit can’t go beyond the salaries they need to subsist. There are a few different terms that might come up during your nonprofit research: Nonprofits exist to fulfill a social cause, and aim to make revenue to further their mission and cover operational costs. Tax-exempt organizations are incorporated nonprofits that have applied for tax-exemption with the federal government. They regularly have to fill out Form 990 to stay in compliance with this status, Not-for-profits are considered recreational organizations, like clubs, and don’t have a specific social cause attached. Typically, they’re run by volunteers. Sometimes these terms are used interchangeably, but it’s important to know the differences when you use terms in documents like your nonprofit business plan! How Do You Know What Type of Nonprofit You Are? We’re going to be exploring 32 different types of nonprofit organizations—which means there’s quite a lot to choose from! Before you start reading, consider: Your mission statement. What’s your purpose? How are you planning on achieving it? When you pare down your mission to a sentence or two, you can find the keywords that’ll point you to the type of nonprofit you are. Who you serve. Some tax-exempt nonprofit statuses are based on who your beneficiaries are, where they’re located or if they’re a part of your membership base. Who organized your nonprofit. Certain nonprofits can only be created by specific types of organizations or individuals. For example, 501(c)(21) organizations (Black Lung Benefit Trusts) must be created and funded by coal mine operators. As you explore the list of 32 types of nonprofits, keep these points in mind and automatically eliminate any categories that don’t apply to you. Let’s start by looking into the 501(c)(3) status, which is one of the most common types of nonprofit! What is a 501c3? Like we said, 501(c)(3) organizations are the most common type of nonprofit. Their missions can include any of these purposes: Religious Charitable Scientific Testing for public safety Literary Educational Fostering national or international amateur sports competitions Preventing cruelty to children or animals 501(c)(3) nonprofits also fall into one of two categories: Public charities receive tax-deductible donations from the public and grant funding from the government and private organizations. This money then goes into supporting communities of beneficiaries. Private foundations distribute their donations in the form of grants and awards, and are not allowed to engage in direct lobbying activities. What are the 5 types of 501c3s? These are specific statuses of some of the subcategories of 501(c)(3)s: 509(a)(1): Nonprofits that exist for public benefit, and must receive at least one third of its support from contributions by the general public. These include organizations like churches, schools and hospitals. 509(a)(2): Nonprofits that earn income primarily from performing a tax-exempt purpose, such as museums and zoos that earn most of their money from admission and membership fees. 509(a)(3): Known as a “supporting organization”, this nonprofit is controlled by and exclusively benefits another organization. Think foundations for universities, libraries, fire departments and more! 509(a)(4): Public safety charities don’t have public support requirements, they simply fulfill the purpose of testing for public safety. Private foundations: Nonprofits that typically receive support from a smaller group of people and distribute them in the form of grants or awards. They have many more restrictions than public charities. Let’s Learn About 32 Types of Nonprofit Organizations! Now that you’ve read through the ins and outs of 501(c)(3)’s, let’s take a full look at 32 types of nonprofit organizations from past and present. If the numbers look out of order, it’s to keep similar designations nice and close so you can see the differences! 501(c)(1) 501(c)(1) organizations must be created through an Act of Congress, and therefore do not need to apply for tax-exempt status or fill out annual tax returns. These organizations include: Federal credit unions Federal home loan banks Federal reserve banks Federal national mortgage associations If the nonprofit’s mission is exclusively for public purpose, donors can get tax breaks. 501(c)(2) 501(c)(2) organizations have a tax-exempt parent entity, and are typically created when the parent entities own property and want to limit their liability on it. For example: Sorority and fraternity houses Churches that want separate filings for the religious organization and the physical house of worship 501(c)(25) 501(c)(25)s are also organizations that hold the title to property on behalf of other organizations. The difference? Where 501(c)(2)s can only have one parent organization, 501(c)(25)s can have up to 35 shareholders or beneficiaries! 501(c)(3) 501(c)(3) status is for types of nonprofit organizations whose purpose is: religious, charitable, scientific, testing for public safety, literary, educational, fostering national or international amateur sports competitions or preventing cruelty to children or animals. For more detail, check out the above section, “What is a 501(c)(3)?” 501(c)(4) 501(c)(4) organizations are social welfare organizations and civic leagues. All proceeds must go to charitable, educational or recreational purposes,and can act politically in the name of social welfare. These organizations can act politically if such action is proven to promote social welfare. This code is how many Super PACs qualify for tax-exempt status under the purpose of “educating the population on specific social welfare issues.” This can include everything from Planned Parenthood to the ACLU to the National Rifle Association (NRA). Other examples of 501(c)(4)s include: Rotary clubs Homeowners associations Local employees associations 501(c)(5) 501(c)(5) status is for labor, agricultural and horticultural organizations. Labor organizations’ purpose must be to educate members or improve work conditions through collective bargaining with their employers. Agricultural or horticultural organizations are similar, but must include working with animal or vegetable life, and often promote improving products and efficiency. Examples of 501(c)(5) organizations include: Farm bureaus Livestock exhibitors Rodeos Garden clubs Breeder associations Farmers cooperatives 501(c)(6) 501(c)(6) status is for business leagues, including: Chambers of commerce Boards of trade Real estate boards Professional football leagues These types of nonprofit organizations are allowed to participate in for-profit activities like lobbying, and should focus on the improvement of conditions in their industry, 501(c)(7) 501(c)(7) organizations are defined as social or recreational clubs, and include: Hobby groups Sororities and fraternities Country clubs Amateur sports clubs and competition leagues Dinner clubs Several regulations are necessary to earn this status: Zero discrimination policy Shared objective of pleasure or recreation Limited membership Funded exclusively by membership fees, dues and assessments Cannot sell products, services or real estate 501(c)(8) 501(c)(8) designation is for lodge organizations or fraternal societies. Their primary purpose is to provide financial support for members and their dependents in case of sickness, accidents, death or other unexpected circumstances. Some examples of 501(c)(8) organizations include: The Knights of Columbus The Elks Lodge The Freemasons 501(c)(10) 501(c)(10) organizations are fraternal associations that don’t provide benefits to members but instead exist to support outside causes (think local chapters!). We know we’ve put this a bit out of order, but we want to highlight how 501(c)(10)s are very similar to 501(c)(8). The only real differentiation is that they are not required to provide payment for life, sickness or accident. Instead, all of their earnings go religious, charitable, scientific, literary, educational, or fraternal purposes. A few examples of 501(c)(10) organizations include: Shriners International The Order of the Eastern Star Chapters of the Freemasons 501(c)(9) 501(c)(9) designation is for Voluntary Employees’ Beneficiary Associations (VEBA), which is composed of groups of employees or members of a labor union who voluntarily donate. They provide similar benefits (payment for life, sickness, accident, etc.) as 501(c)(9) organizations, but exclusively to fellow employees. They require a non-discrimination clause, and benefits must be equal for all employees regardless of what they earn. Some examples of 501(c)(9) organizations include: Labor unions Walmart Inc. Associates Health and Welfare Trust AT&T Union Welfare Benefit Trust 501(c)(11) 501(c)(11) organizations are created to manage teachers’ retirement funds. These associations collect funds through taxes, investments, and member donations and dues. Members can include all school employees, from teachers to librarians to cafeteria staff! 501(c)(12) 501(c)(12) organizations include local benevolent life insurance associations and other similar organizations that: Use their income to cover losses and expenses (with excess either given to to members or saved for future costs) Collect at least 85% of their income from their members for loss and expense costs This exemption is meant to make it so members can have services provided at the lowest possible cost! A few types of 501(c)(12) types of nonprofit organizations are: Local benevolent life insurance associations Mutual irrigation companies Telephone companies 501(c)(13) 501(c)(13) designation is for cemeteries and other organizations that specialize in providing burial and cremation services. All income must be used for buying cemetery or crematorium property or the costs associated with operations, maintenance and improvement. These organizations are also allowed to sell monuments, markers, vaults and flowers meant exclusively for the cemetery, and may operate no other business, including a mortuary. 501(c)(14) 501(c)(14) organizations are state-chartered credit unions and mutual reserve funds, and exist primarily to give loans to members. They provide credit for low- to moderate-income members who work at the same job or are in the same community. 501(c)(15) 501(c)(15) designation is for mutual insurance companies and exists so members can receive insurance at a reasonable cost. These organizations serve small communities, and typically cover insurance for unexpected costs like property damage or funeral expenses. 501(c)(16) 501(c)(16) status is for cooperative groups created to finance crop operations. Farmers cooperative associations or local livestock credit corporations would fall under this category. The activities 501(c)(16)s can cover include: Farm equipment Crop cultivation Livestock Warehouse Shipping Marketing. Where 501(c)(5)s work on improving working conditions, 501(c)(16)s are about keeping current the day-to-day operations needs met. 501(c)(17) 501(c)(17) organizations are supplemental unemployment benefit trusts. These types of nonprofit organizations benefit individuals who have been temporarily or permanently laid off. In order to be tax-exempt, this trust must exist only for the purpose of providing supplementary compensation without discrimination. 501(c)(18) 501(c)(18) designation is for employee-funded pension trusts created before 1959. If you’re just starting a nonprofit, you don’t need to worry about this one! 501(c)(19) 501(c)(19) designation is for veterans organizations. At least 75% of members must be past or present members of any branches of the United States’ Armed Forces. Trusts and foundations can also qualify for 501(c)(19) status if they exclusively serve the Armed Forces. 501(c)(19) organizations must have one or more of these purposes: Help assist disabled and needy veterans through social welfare programs Assist dependents of veterans, as well as spouses and orphans of deceased veterans Provide entertainment, care and assistance to hospitalized Armed Forces members and veterans Create remembrance programs Provide insurance for Armed Forces members and dependents Sponsor patriotic activities Provide social and recreational activities Some examples of 501(c)(19) organizations include: Disabled American Veterans Charity Veterans of Foreign Wars Wounded Warrior Project 501(c)(23) – Outdated! 501(c)(23) designation is for veterans organizations founded prior to 1880. These types of nonprofit organizations operate the same way as the 501(c)(19)s. Unless you’re time traveling, this designation doesn’t apply to you! 501(c)(20) – Outdated! 501(c)(20) designation was for qualified legal service plans, but no longer exists as of 1992. 501(c)(21) 501(c)(21) designation is uniquely for black lung benefit trusts created to pay benefits claims as part of the Black Lung Benefits Act of 1969. This enforces coal mine operators paying benefits to miners who developed black lung from long term exposure to coal dust. These nonprofits also pay insurance premiums, accident and health benefits to miners’ spouses and dependents. 501(c)(22) – Outdated! 501(c)(22) designation was created to meet liabilities of employers withdrawing from multiemployer pension funds. 501(c)(24) – Outdated! According to Ballotpedia: “501(c)(24) was an Internal Revenue Service (IRS) tax exemption status that applied to single-employer benefit trusts described in Section 4049 of the Employee Retirement Income Security Act (ERISA) of 1974. This provision was repealed by the Pension Protection Act of 2006.” 501(c)(26) 501(c)(26) designation is for state-sponsored health coverage organizations for high-risk individuals who can’t get coverage through other medical companies due to pre-existing conditions. 501(c)(27) 501(c)(27) designation is for state-sponsored workers’ compensation organizations. These types of nonprofits can take one of two sub-designations: 501(c)(27)(a): Established before June 1996 501(c)(27)(a): Established after December 1997 501(c)(28) 501(c)(28) status is for a highly specific type of nonprofit organization: the National Railroad Retirement Investment Trust. This nonprofit was created by the Railroad Retirement and Survivors Improvement Act of 2001, with the purpose of diversifying the investments of the railroad retirement account assets. This trust funds the retirement benefits of railroad workers and their dependents with an accessible pay-as-you-go pension system. 501(c)(29) 501(c)(29) is a new designation that was passed as a part of the Affordable Care Act, which provides tax exemption to all qualified nonprofit health insurance issuers who received a loan or grant under the Medicare & Medicaid Services Co-op program. 501(d) 501(d) status is for religious or apostolic groups that share their income in a common or community treasury. The community runs a business that funds the benefit of all members—usually, these are farming or manufacturing communities! Their community owns their property, and they can participate in for-profit activities including politics. 501(e) 501(e) types of nonprofits are cooperative hospital service organizations that must provide one of more of these services for two or more tax-exempt hospitals: Data processing Purchasing Warehousing Billing Collecting Food Clinical Industrial engineering Laboratory Printing Communications Recordkeeping Personnel 501(f) 501(f) designation is for cooperative service organizations of operating educational organizations. These types of nonprofits pool together and invest money from members into stocks and securities. Then, it reinvests the income or dividends made from the investments to the same members (minus expenses!). 501(k) 501(k) types of nonprofits are publicly available child care organizations. The idea behind these organization’s getting tax-exemption is that they are providing a public good by giving parents the ability to be gainfully employed! 501(n) 501(n) status is for charitable risk pools as long as they are organized, created for charitable purposes and pool member insurance risks. These organizations must: Have a minimum of one million in startup capital from non-charitable organizations Provide all members with information about loss control and risk management Not pool risk concerning medical malpractice Only have tax-exempt members FAQs Whew! After that thorough look at the different types of nonprofits, let’s cover (and review!) a few quick questions: What is the purpose of the different types of nonprofit organizations? All of the different types of nonprofit organizations have a different purpose because there are a large number of social needs in our current world! The unique designations make it possible for the government to regulate nonprofits and provide them with the support they need. What are the most popular types of nonprofits? The most popular types of nonprofits at 501(c)(3) organizations. What types of governance for nonprofit organizations are there? The different types of governance for nonprofit organizations are the: Advisory board model where the CEO is the true founder of the organization, but consults the board of directors for support. Patron model where it’s the board’s primary job is to find major donors for fundraising. Cooperative model where there is no CEO or manager. Management team model which divides all responsibilities into different committees. Policy governance model which is similar to the advisory board model, but with more formal committees and regular meetings. Community engagement model which is highly flexible and extends responsibilities to constituents and stakeholders. What types of audits are done for nonprofit organizations? Nonprofit organizations will experience four different types of audits: Operational audits to assess the efficiency of your organization and explore what changes could improve your day-to-day affairs (like investing in membership management software!). Financial audits make sure your books are in order, and can help assess the fiscal health of your organization. Having wonky records can get you in some real legal trouble, so make sure you keep up with your documentation! Internal audits identify growth opportunities you have from within, and keep your company culture healthy. External audits let you see how your business is doing from the outside. Once you’re out of the fishbowl, you can visualize tools for future success. What types of software are helpful for nonprofit organizations? No matter your IRS designation, mission or governance model, your nonprofit organization can always benefit from investing in nonprofit software! Here at WildApricot, our membership management software can: Create a thorough internal member directory Automate and schedule emails Build you a beautiful website—or integrate into your current CMS! Securely process member dues Create an online store Make exclusive members-only space Customize forms Mange events And more! With all the work that goes into running a nonprofit, why not simplify the behind-the-scenes processes? Sign up for your 60-day free trial of WildApricot today to see what we’re all about! Knowing Which Type of Nonprofit You Are We hope this complete list of different types of nonprofit organizations has cleared up any confusion you might have. Good luck getting that paperwork sorted—we can’t wait to see where your mission takes you! 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