19 types of nonprofits: Which one you should file under
When people hear “nonprofit,” they often think of 501(c)(3) organizations — well-known public charities and private foundations like the American Red Cross, YMCA, PETA, and the Bill and Melinda Gates Foundation.
But “nonprofit” isn’t always synonymous with “charity.” It’s actually an umbrella term that refers to roughly 30 different types of tax-exempt organizations listed under Section 501 of the Internal Revenue Code. They include everything from social advocacy groups and labor unions to credit unions and recreational clubs.
One factor unites most nonprofit organizations. They’re created to promote social good and spur progress on important issues, whether it’s educating the public, feeding families, lobbying for legal reform, funding disease research, or connecting the community.
To maintain their tax-exempt status, nonprofits have to take profit they receive from donations, sponsorships, and other sources and funnel it back into their organization to further their cause. They can make money, but only to cover operating activities like serving their supporters and beneficiaries and paying staff salaries.
If you’re planning to start a nonprofit, it’s vital to understand the different types of tax-exempt organizations you can choose from. Although 501(c)(3)s are the most common, each classification has different rules about eligibility, political activity, and finances that could make it easier to achieve your goals.
Here are 19 common types of nonprofits and real-world examples of successful organizations.
19 different types of nonprofits
We’ve sourced the information below using Internal Revenue Service (IRS) Publication 557, which explains how to apply for each nonprofit tax exemption. If you plan to file for 501(c)(3), you can save time by reading our guide to starting a nonprofit.
501(c)(1): Corporations organized under Act of Congress
Examples of a 501(c)(1): Andrews Federal Credit Union, Farm Credit Bank of Texas
Most 501(c)(1) organizations are financial, but a 501(c)(1) simply refers to tax-exempt organizations that are established by law. For instance, the Federal Credit Union Act and Federal Farm Loan Act led to the creation of 501(c)(1)s like federal credit unions and farm loan banks.
501(c)(2): Title-holding corporations
Examples of a 501(c)(2): APA Holding Corporation, Legacy Title Holding Corporation
501(c)(2) organizations aren’t operating organizations. They’re created solely to hold titles for nonprofit corporations, and can help lower the risk associated with owning property.
501(c)(3): Charitable organizations
Examples of a 501(c)(3): Feeding America, Habitat for Humanity, National Geographic Society
Of the 1.54 million nonprofits registered in the United States, about two-thirds are 501(c)(3) charities. These organizations are committed to causes that are charitable, religious, educational, scientific, or literary. They may also conduct testing for public safety, hold amateur sports competitions, or further the prevention of cruelty to children or animals.
501(c)(3)s largely rely on fundraising pushes and individual donations — which are tax-deductible for donors — as well as government grants and membership dues. Generally, they’re prohibited from directly or indirectly engaging in political campaigns and lobbying.
In one survey, 73% of respondents said it was very important to trust a charity before they made a donation. Givebutter helps 501(c)(3)s establish credibility by giving IRS-verified organizations a prominent verification badge on their fundraising pages.
501(c)(4): Civic leagues, social welfare organizations, and employee associations
Examples of a 501(c)(4): National Association for the Advancement of Colored People (NAACP), American Civil Liberties Union (ACLU), American Association of Retired Persons (AARP)
501(c)(4) organizations are known as social welfare organizations. They’re created to promote the common good and support their members. Typically, funding comes from membership dues, and contributions aren’t tax-deductible. 501(c)(4)s are exempt from federal income tax, and they can engage in political activities as long as it’s not their primary purpose or activity.
501(c)(5): Labor, agricultural, and horticultural organizations
Examples of a 501(c)(5): National Education Association, United Steelworkers, Sunset Empire Orchid Society
501(c)(5) organizations improve working conditions and provide education in the labor, agricultural, and horticultural sector. They’re generally funded through donations and union dues, and may engage in political lobbying.
501(c)(6): Business leagues, chambers of commerce, and real estate boards
Examples of a 501(c)(6): National Hockey League (NHL), American Bar Association, National Writers Union
501(c)(6) organizations improve working conditions, offer instructional programs and services, and advance the business interests of their members. These nonprofits can engage in political activity, although they may have to notify their members.
501(c)(7): Social and recreational clubs
Examples of a 501(c)(7): Boca West Country Club, Delta Sigma Theta, Inc.
501(c)(7) organizations are created for pleasure, recreation, and other social activities. They include fraternities and sororities, hobby/interest clubs, cultural clubs, country clubs, sports leagues, and more. Members generally pay non-tax-deductible dues or fees to support the organization.
501(c)(8): Fraternal beneficiary societies and associations
Examples of a 501(c)(8): Knights of Columbus, Foresters Friendly Society
501(c)(8) organizations are fraternal groups that provide payment and benefits for life, sickness, accidents, and other scenarios to members and dependents. 501(c)(8)s must operate under the lodge system, which means there’s one parent organization which has subordinate organizations like chapters or branches. They may include secret societies, fraternities and sororities, service clubs, and lineage clubs.
501(c)(9): Voluntary employee beneficiary associations
Examples of a 501(c)(9): Wells Fargo & Company Employee Benefit Trust, Walmart Stores Inc. Associates’ Health & Welfare Trust
501(c)(9) organizations provide payments to members and their dependents in cases of sickness, accidents, and other life events. They must be formed voluntarily by a group of employees that share an employment-related bond, like co-workers or members of the same union.
501(c)(10): Domestic fraternal societies and associations
Examples of a 501(c)(10): Ancient Free and Accepted Masons, Alpha Nu Omega, Inc.
Unlike 501(c)(8)s, 501(c)(10) organizations don’t provide payment or benefits to society members. Member dues and other earnings are devoted to other fraternal causes, charitable causes, and other areas that further their mission.
501(c)(11): Teachers' retirement fund associations
Examples of a 501(c)(11): St. Paul Teachers’ Retirement Fund Association, Boston Public School Teachers Retirement Fund
501(c)(11) organizations manage and pay out teachers’ retirement funds and benefits. These types of nonprofits must be locally organized and funded by membership contributions, tax proceeds, and investment income.
501(c)(13): Cemetery companies
Examples of a 501(c)(13): Albany Cemetery Association, Williamsburg Memorial Park
501(c)(13) cemetery companies are tax-exempt entities that may provide burial services and sell related memorabilia, such as grave markers and flowers. Charitable contributions are tax-deductible as long as they’re donated to the entire organization and not one specific plot.
501(c)(14): State-chartered credit unions and mutual reserve funds
Examples of a 501(c)(14): General Electric Credit Union, Alliant Credit Union
Under Section 501(c)(14), states can establish credit unions and other mutual financial organizations that are exempt from federal income tax. This includes cooperative banks, loan associations, and other corporations that provide services and products to their members and communities.
501(c)(15): Mutual insurance companies or associations
Examples of a 501(c)(15): Big Sky Farm Mutual Insurance Company, South Florida Dentists Insurance Trust
A 501(c)(15) mutual insurance company is owned by its policyholders (or members) and aims to provide them with insurance coverage at or near cost. If the company makes any profit, it’s given directly to members or used to reduce policy costs. These nonprofits are typically organized at a local level and membership is restricted to individuals in a particular county.
501(c)(16): Cooperative organizations to finance crop operations
Examples of a 501(c)(16): National Livestock Credit Corporation, National Finance Credit Corporation of Texas
501(c)(16) organizations secure funding for farm equipment, crop cultivation, livestock, warehousing, shipping, marketing, and other resources that support eligible crop operations. They’re typically established by a farmers' cooperative or its members.
501(c)(17): Supplemental unemployment benefits trusts
Examples of a 501(c)(17): Builders and Contractors Supplemental Unemployment Benefits Trust, Electrical Industry Supplemental Unemployment Benefits Fund
501(c)(17) organizations provide payments and support to individuals who are permanently or temporarily laid off from their jobs. The trust must be formed and supported by either the employer or the employees, and funds can’t be used for any purpose other than paying benefits. 501(c)(17)s may also offer secondary benefits for injury and sickness.
501(c)(18): Employee-funded pension trust
Example of a 501(c)(18): Inter-Local Pension Fund
The 501(c)(18) tax status applies to employee pension trusts that were created before June 25, 1959 and authorized for pension and retirement benefits. The trusts must be funded solely by member contributions and can’t be used for any purpose other than benefit payments.
501(c)(19): Veterans organizations
Examples of a 501(c)(19): American Legion Auxiliary, 101st Airborne Division Association
The 501(c)(19) status applies to certain veterans organizations. To be eligible, at least 75% of members must be active or former members of the armed forces. In addition, at least 97.5% of members must be active or former armed forces members, cadets, or a member's spouse or close relative. Veterans organizations are often funded by individual donations, which are tax-deductible.
501(c)(23): Veterans organizations (created before 1880)
Examples of a 501(c)(23): Navy Mutual Aid Association, American Armed Forces Mutual Aid Association
The 501(c)(23) status is similar to the 501(c)(19) status, except it applies to veterans organizations that were established before 1880. In addition, 501(c)(23) organizations primarily provide insurance benefits to their members and dependents.
There’s a lot to consider when you’re deciding which tax-exempt status to apply for and how to organize your nonprofit.
We highly recommend reaching out to an experienced lawyer or an accounting professional for advice throughout this process. That way, you can avoid filing mistakes and start raising funds and awareness for your cause even faster, no matter which type of nonprofit you choose.
If you’re ready and eligible to raise funds, get started with Givebutter for nonprofits. Our free fundraising platform lets you collect donations, create event pages, and share powerful fundraising campaigns in seconds. When we say “free,” we mean it! There are no platform fees and we enable donors to pay your credit card fees, so you keep 100% of every cent you raise. See for yourself — click here to sign up.