nonprofit consulting zone blog

Most People Aren’t Aware Of This About Nonprofits

How many different kinds of American nonprofits are there? No, I’m not talking about how many nonprofits total, or whether you have 50 little leagues and 10 hospitals, I’m talking about how many different types exist. They’re not all 501(c)3s, you know.

A recent count puts the number at somewhere around 35*. What does that mean? While the 501(c)3 is the most commonly known, Congress, in its wisdom, has set up a wide variety of nonprofit types to address any number of situations for the public good. These include chambers of commerce (501(c)6), black lung benefit trusts (501(c)21), credit unions (501(c)1), mutual insurance companies and associations (501(c)15), and others you may have heard about like 501(c)4’s (Civic Leagues and more) and 529’s (college savings plans), 501(c)13, cemetery corporations (13? Who says the government doesn’t have a sense of humor?)

It’s important to realize that the 501(c)3’s and a small handful of others give the benefit of a deduction on one’s taxes in the United States in return for a charitable gift. Just about all the remaining kinds, while tax-exempt like a 501(c)3 , do not allow you to take a deduction for a gift made to them.

For our purposes, unless you are a consultant for charitable gift fundraising, there are many similarities between nonprofit organizations regardless of gift deductibility. Primary among these is the role of mission. Like the 501(c)3’s, these other organizations are mission focused. They provide a service which benefits the people who subscribe to them, and often the public good. After all, if private cemeteries didn’t exist, it would be a government responsibility to provide a final resting place for its citizens. So it’s not a bad deal for the public to make a cemetery a tax-exempt entity.

So while chances are you’ll be dealing with a 501(c)3, remember that there is a whole world of other nonprofit organizations which might be able to use your services that look kind of like your typical nonprofit, but have a very different view of the world.

*For a complete list of nonprofit types, see IRS Publication 557 (October 2013), “Tax-Exempt Status for Your Organization” (http://www.irs.gov/pub/irs-pdf/p557.pdf), pp. 68-69

Published by

Matt Hugg

Matt Hugg is the president of Nonprofit.Courses.

See his bio here.