Posted by Jay Wilkinson


According to BoardSource, the United States is home to more than 1.6 million nonprofit organizations, including public charities, foundations, social advocacy groups and trade organizations. But did you know that not all nonprofits are formed and legislated the same? There are a lot of sub-groups under the nonprofit umbrella, and if you’ve ever considered starting one, it’s good to know a little about what they are.

Most nonprofits in the U.S. are public charities that provide free and low-cost services like health care for the homeless or career workshops for the unemployed. Churches, libraries, museums, hospitals and private schools can all qualify as public charity nonprofits.

The public tends to lump all nonprofits into one group, but there are really several types—the IRS recognizes 29 types, in fact. They’re all, to some degree, exempt from federal taxes and many state taxes. But each type is different when it comes to eligibility, lobbying, electioneering and tax deductible contributions.

While the most common nonprofit is a 501(c)(3), it’s good to know what other types the IRS recognizes. If you’re thinking about starting an organization, you’ll want to determine your goals and vision first.

For example, do you want to engage in politics? A 501(c)(4) classification might be appropriate for you. Both 501(c)(3) and 501(c)(4) organizations are exempt from paying federal income tax, but the latter can engage in political activity, endorse or oppose political candidates or donate money to political campaigns, all activity that that's impermissible for 501(c)(3)s. If you want the best of both worlds, you can form two organizations—a charitable 501(c)(3) and the other a 501(c)(4) lobbying arm. Many trade organizations have done this.

Here's a quick look at the classifications that cover the great majority of nonprofits in the U.S.:

Whether you’re interested in starting a nonprofit or growing your existing one, we have the necessary tools and functionality to help get you on your way

Whether you’re interested in starting a nonprofit or growing your existing one, we have the necessary tools and functionality to help get you on your way. Simply sign up to request a free demo of our nonprofit website platform or call 877.447.8941.


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