What are the Types of Nonprofits?

By Ananth Seshadri5 min read · Posted Dec 27, 2022

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What is a Nonprofit?

A nonprofit is a legal organization created to benefit a particular cause, including social, public, or collective causes. There are many different types of nonprofit organizations, which can each be distinguished through their missions, functions, and certified titles.

The 32 Types of Nonprofits (Yes, there are a lot...)

**501(c)(1):**501(c)(1) nonprofit organizations are generally operated through Congress or Congressional acts. A notable example of this nonprofit organization is a federal credit union. Since Congress manages these organizations, they are exempt from tax as long as their work promotes public benefit.

**501(c)(2):**This certification grants tax exemption to independent corporations if they establish connections with other tax-exempt nonprofits. Using a 501(c)(2) organizational tax structure will create a need for owners to give up their income to at least one non-tax-paying organization.

**501(c)(3):**This is the most common and notable nonprofit organization, focusing on various causes that help the public. These causes include the promotion of religion, the facilitation of animal safety, and the creation of multiple recreational events for the people, etc. 501(c)(3) organizations, mainly charities or private foundations, must pay 990 tax returns annually to maintain their tax-exempt status.

**501(c)(4):**This certification provides tax exemption for civic and social welfare organizations. Typically, 501(c)(4) organizations are known only to have one location and one employer. However, their earnings must be for charity, recreation, and education.

**501(c)(5):**This certification grants tax exemption for labor, agricultural, and horticultural organizations. Labor organizations commonly utilize collective bargaining to enhance their status, while agricultural and horticultural organizations focus on improving the conditions of animals and crops.

**501(c)(6):**This certification provides tax exemption for business league organizations. 501(c)(6) organizations most notably include commerce chambers, real estate, trade boards, and professional football leagues. These are usually located in one city and mainly focus on improving their business.

**501(c)(7):**This allows many social and recreational clubs not to pay taxes, such as college fraternities and sororities, hiking clubs, country clubs for hunting, tennis, swimming, fishing, and dinner clubs.

**501(c)(8):**This certification provides tax-exempt status for organizations that are considered fraternal beneficiary societies. They collect tax-deductible gifts for charitable purposes, such as paying for people who are sick or have been involved in severe accidents.

501(c)(9):This certification grants tax exemption for organizations known as Voluntary Employees' Beneficiary organizations. Reminiscent of 501(c)(8) organizations, they primarily focus on helping members who undergo severe illnesses, accidents, and other life-threatening situations.

**501(c)(10):**This certification grants tax exemption to domestic fraternal organizations. Typically, 501(c)(10) associations give their earnings to promote scientific, literary, religious, educational, charitable, and fraternal causes.

**501(c)(11):**This certification grants tax-exempt status to teacher retirement facilities. These facilities are funded through taxes, donations, and investment revenue.

**501(c)(12):**This certification provides tax exemption for organizations, such as insurance associations, mutual irrigation, and telephone companies, to ensure that citizens get these services for lower costs.

**501(c)(13):**This certification grants tax exemption for cemetery companies, even while they pay operation and maintenance costs. They mainly spend their funds on new land and the improvements of cemeteries and crematoriums.

**501(c)(14):**This provides tax-exempt status for state-chartered credit unions and other mutual financial organizations. These credit unions attain this status due to their ability to benefit low-to-medium-class populations as they act as a primary source of credit.

**501(c)(15):**This certification provides tax exemption for small mutual insurance companies and associations. 501(c)(15) organizations give costs and benefits towards burial, funeral, and property damage services.

**501(c)(16):**This certification provides tax exemption for corporate organizations that help finance crop organizations. Typically, 501(c)(16) organizations pay funds for farm equipment, crop cultivation, livestock, warehouse amounts, and shipping and marketing improvements.

501(c)(17):This certification states that extended layoff benefit trusts can be exempt from taxes if they agree only to pay for bonus compensation benefits and to not discriminate against potential employees.

**501(c)(18):**This says that pension trusts funded fully by their employees and created before June 25th, 1959, are granted exemption from taxes. 501(c)(18) organizations provide benefits to unemployed people.

501(c)(19): This certification provides all veteran organizations tax exemption if at least 75% of their members were part of the armed forces. 501(c)(19) organizations support disabled and in-need veterans by creating remembrance programs, patriotic events, and recreational activities. They also provide insurance for their members.

**501(c)(21):**This certification makes coal mining operations pay benefits to miners who suffer long-term and severe lung diseases due to the accumulation of coal dust in their bodies. These benefits come from trust funds funded by coal mining operators, who pay premiums for miners' insurance, accident and health benefits, and overall expenses.

**501(c)(22):**This tax exemption provides funds for employees who withdraw from multi-expansion pension funds.

**501(c)(23):**This certification grants tax exemption to veteran organizations with more than 75% past or present armed force members created before 1880.

**501(c)(25):**This states that corporations or trusts can acquire, hold, and collect income from real property, as well as give their income entirely to tax-exempt organizations. In contrast to single-parent corporation titleholders, 501(c)(25) organizations can have a maximum of 35 shareholders or beneficiaries.

**501(c)(26):**This certification states that high-risk healthcare organizations sponsored by states can provide insurance and use HMOs(Health Benefit Organizations) to provide services.

**501(c)(27):**This certification has two separate subcategories that allow tax exemption from organizations. This is split into two different groups: 501(c)(27)(a), which guarantees tax exemption from organizations created before 1996, and 501(c)(27)(b), which does the same for organizations formed after 1996.

**501(c)(28):**This helps manage railroad retirement account features and investments to increase their diversification.

**501(c)(29):**This certification, along with the Affordable Care Act, grants tax exemption for all members given grants or loans under medicare or the co-op Medicaid service program.

**501(d):**This certification provides tax exemption to particular religious groups, such as shakers, if their income is shared in a community account. These religious communities often are known for farming or manufacturing and own all of their property.

**501(e):**This grants tax exemption to corporate hospital organizations if they can help and support two or hospital non-tax-paying hospitals. This includes organizations known for warehousing, billing, food, industrial engineering, printing, communications, and hospital service.

501(f): This guarantees that cooperative organizations have tax-exempt status if they invest money given by educational organization members and return the money.

**501(k):**This states that childcare organizations receive tax exemption if gainful employment is given to the children's parents. More than 85% of the services should target parents rather than employers.

**501(n):**This combines some insurance risks of 501(c)(3) organizations. These charitable risk pools also give information regarding the management of risks and loss control. The members of charitable risk pools are all tax-exempt.

References

  • https://www.charitynavigator.org/donor-basics/giving-101/types-of-nonprofits/
  • https://donorbox.org/nonprofit-blog/types-of-nonprofits
  • https://www.shopify.com/uk/blog/types-nonprofits (Cover Image)

About The Author

Ananth Seshadri

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Hello, I am Ananth Seshadri, an Article Writer at Pitch Labs! I am interested in law and love to write articles about impactful topics. With my passion and dedication, I hope to captivate and inspire people in the present and future with my writing.

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