{"id":14959,"date":"2023-05-26T10:05:17","date_gmt":"2023-05-26T15:05:17","guid":{"rendered":"https:\/\/www.charityauctionstoday.com\/p\/?p=14959"},"modified":"2023-11-01T11:11:02","modified_gmt":"2023-11-01T16:11:02","slug":"different-types-of-nonprofits","status":"publish","type":"post","link":"https:\/\/www.charityauctionstoday.com\/p\/different-types-of-nonprofits\/","title":{"rendered":"Different Types of Nonprofits"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"14959\" class=\"elementor elementor-14959\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-eb7fe0b elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"eb7fe0b\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-eb96548\" data-id=\"eb96548\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-c335949 elementor-widget elementor-widget-image\" data-id=\"c335949\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/www.charityauctionstoday.com\/p\/wp-content\/uploads\/2023\/05\/claudia-raya-yvam-unsplash-1024x683.jpg\" class=\"attachment-large size-large wp-image-14960\" alt=\"volunteer and man with gift bag\" srcset=\"https:\/\/www.charityauctionstoday.com\/p\/wp-content\/uploads\/2023\/05\/claudia-raya-yvam-unsplash-980x551.jpg 980w, https:\/\/www.charityauctionstoday.com\/p\/wp-content\/uploads\/2023\/05\/claudia-raya-yvam-unsplash-480x270.jpg 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" title=\"\">\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-a6025c2 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"a6025c2\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-ae91326\" data-id=\"ae91326\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-03f6c77 elementor-widget elementor-widget-text-editor\" data-id=\"03f6c77\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">If you\u2019ve ever wondered what makes a nonprofit, well, it\u2019s in the name. But there are different types of nonprofits, especially when you get into the legalities of tax breaks. In fact, because nonprofits are, by definition, not looking to make a profit, they can apply to the IRS to get off the hook for income tax.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Obviously, this tax exemption is a big deal and allows nonprofits to put the money that would have gone to income taxes towards resources that will aid them in their mission instead.\u00a0<\/span><\/p><h3><span style=\"font-weight: 400;\">What is a nonprofit?<\/span><\/h3><p><span style=\"font-weight: 400;\">We sometimes casually throw around the term \u201cnonprofit\u201d and use it synonymously with \u201ccharity,\u201d but the truth is that this term refers to organizations that aren\u2019t businesses (literally: not-for-profit). Of course, many of these organizations <\/span><i><span style=\"font-weight: 400;\">do<\/span><\/i><span style=\"font-weight: 400;\"> serve their communities in charitable ways, but some simply represent credit unions, business leagues, or other organizations that fall under the legal definition of nonprofit.<\/span><\/p><p><span style=\"font-weight: 400;\">Broadly speaking, what we <\/span><i><span style=\"font-weight: 400;\">think <\/span><\/i><span style=\"font-weight: 400;\">of as nonprofits can fall into these categories:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Casual or informal charities: These are very small groups of people working to help others, for example, a group of neighbors doing a beach clean up. However, if you plan to raise money or deduct expenses, you need to formalize your group into a corporation.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Incorporated nonprofits: Creating a corporation is a way for your group to become a formal entity that can have a bank account, take out a loan, and continue to exist even if the leaders in charge change over time. A nonprofit corporation isn\u2019t necessarily tax-exempt, though.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tax-exempt nonprofits: A nonprofit organization has to file with the IRS in order to be exempt from taxes (they can only do this if they\u2019ve incorporated first). These types of nonprofits are usually legally categorized as 501(c)s.\u00a0<\/span><\/li><\/ul><h3><span style=\"font-weight: 400;\">Types of Nonprofits<\/span><\/h3><p><span style=\"font-weight: 400;\">Often, when you\u2019re talking about a nonprofit\u2014like St. Jude\u2019s or the Red Cross\u2014it\u2019s a 501(c). But there are many different types of 501(c) organizations! There are also other types of 501 statuses, like 501(d) (religious and apostolic organizations) or 501(k) (publicly-available child care organizations). Below we\u2019ll give a brief overview of each of the 501(c) nonprofit types, but you should consult <\/span><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p557.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">IRS tax exemption materials<\/span><\/a><span style=\"font-weight: 400;\"> for more information, especially if you\u2019re researching to see whether your organization can apply for 501 status.<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(1) &#8211; These are corporations organized under an act of Congress, including federal credit unions, federal reserve banks, and other corporations that are instruments of the US government.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(2) &#8211; Corporations that are organized for the exclusive purpose of holding title to property whose profits go towards another 501(c) corporation.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(3) &#8211; These are charitable, educational, or religious organizations like churches, elderly care homes, and after-school clubs for at-risk youth.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(4) &#8211; Social welfare nonprofits can file for this status. This can include organizations that lobby and get involved in politics as long as their work benefits a community rather than private groups or individuals.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(5) &#8211; These are agricultural organizations, including horticultural and farm labor organizations.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(6) &#8211; Business leagues like chambers of commerce or boards of trade.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(7) &#8211; These are social or recreational clubs like alumni associations or country clubs.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(8) &#8211; Lodges, fraternal orders, and societies that pay life or accident insurance or other benefits to members in addition to hosting social activities.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(9) &#8211; Voluntary employee organizations, like a (non-mandatory) union or other group that works for the same employer, which pay life, sickness, and accident insurance to members.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(10) &#8211; These are organizations related to lodges or social organizations\u2019 charitable wings.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(11) &#8211; These are teachers&#8217; retirement fund organizations.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(12) &#8211; Members of these types of nonprofits receive life insurance, irrigation, phone service, and other services at the lowest possible cost.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(13) &#8211; This type of nonprofit includes cemeteries or other organizations that deal with burial or cremation (although they cannot be mortuaries).<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(14) &#8211; These are state-chartered credit unions or other mutual financial organizations.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(15) &#8211; These are small insurance companies that offer each other mutual benefits and offer members insurance and other services at cost.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(16) &#8211; These finance agricultural organizations; for example, a farmers\u2019 cooperative association helps fund equipment, crops, warehousing, etc.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(17) &#8211; These are trusts created to pay supplemental unemployment compensation benefits regardless of the employee\u2019s salary.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(18) &#8211; These are pension trusts funded only by employees and started before June 25, 1959.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(19) &#8211; These nonprofits are veterans organizations that provide insurance and other services to past and present veterans.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(21) &#8211; Black Lung (or pneumoconiosis) trusts provide for medical treatment for miners suffering from this disease, as well as benefits for their widows.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(22) &#8211; These nonprofits are organized by the US government to provide liability funds to employers who are withdrawing funds from multiemployer pensions.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(23) &#8211; These are specifically veterans organizations that were formed before 1880.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(25) &#8211; This status applies to title-holding corporations or trusts for multiple parent corporations.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(26) &#8211; This status is for state-organized entities that provide insurance or services to high-risk individuals.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(27) &#8211; These are state-sponsored workers\u2019 compensation organizations.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(28) &#8211; This relatively new (since 2002) status applies specifically to the National Railroad Retirement Investment Trust.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">501(c)(29) &#8211; The Affordable Care Act created this status for nonprofit health insurance issuers who receive loans or grants under Medicare or Medicaid<\/span><\/li><\/ul><p><i><span style=\"font-weight: 400;\">Fun Fact: Did you notice there\u2019s no 501(c)(20) status? That\u2019s because this designation for qualified group legal services plans was discontinued in 1992 when it was decided these organizations could be folded in with 501(c)(9) voluntary employee benefits associations. There\u2019s also no 501(c)(24), as this provision for single-payer benefit trusts was repealed by the Pension Protection Act of 2006.<\/span><\/i><\/p><p><span style=\"font-weight: 400;\">If you\u2019re trying to decide whether or not to apply for 501(c) status, you should do your homework. Although there are clear benefits to tax exemptions, you will be committing to ongoing paperwork as well as, possibly, increased scrutiny. You will be upheld to specific standards no matter what type of nonprofit status you apply for. Consider examining the IRS\u2019s guide to <\/span><a href=\"https:\/\/www.irs.gov\/charities-non-profits\/how-to-apply-for-501c3-status\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">applying for 501(c) exemption<\/span><\/a><span style=\"font-weight: 400;\"> to get a better idea of whether your organization is ready for this step.<\/span><\/p><p><span style=\"font-weight: 400;\">Top image credit: Claudia Raya, Unsplash<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-ce21cb7 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"ce21cb7\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b6fa407\" data-id=\"b6fa407\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-207fd69 elementor-cta--skin-classic elementor-animated-content elementor-bg-transform elementor-bg-transform-zoom-in elementor-widget elementor-widget-call-to-action\" data-id=\"207fd69\" data-element_type=\"widget\" data-widget_type=\"call-to-action.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-cta\">\n\t\t\t\t\t<div class=\"elementor-cta__bg-wrapper\">\n\t\t\t\t<div class=\"elementor-cta__bg elementor-bg\" style=\"background-image: url(https:\/\/www.charityauctionstoday.com\/p\/wp-content\/uploads\/2023\/05\/marketing-strategy-1024x455.jpg);\" role=\"img\" aria-label=\"topview of creative agency business brain storm meeting\"><\/div>\n\t\t\t\t<div class=\"elementor-cta__bg-overlay\"><\/div>\n\t\t\t<\/div>\n\t\t\t\t\t\t\t<div class=\"elementor-cta__content\">\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<h2 class=\"elementor-cta__title elementor-cta__content-item elementor-content-item\">\n\t\t\t\t\t\tGet Your Nonprofit on Track\t\t\t\t\t<\/h2>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-cta__description elementor-cta__content-item elementor-content-item\">\n\t\t\t\t\t\tReduce costs and save time by taking your auctions online. \t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-cta__button-wrapper elementor-cta__content-item elementor-content-item \">\n\t\t\t\t\t<a class=\"elementor-cta__button elementor-button elementor-size-\" href=\"https:\/\/www.charityauctionstoday.com\/p\/live-demo\/\">\n\t\t\t\t\t\tStart Here\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>If you\u2019ve ever wondered what makes a nonprofit, well, it\u2019s in the name. But there are different types of nonprofits, especially when you get into the legalities of tax breaks. In fact, because nonprofits are, by definition, not looking to make a profit, they can apply to the IRS to get off the hook for [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":14960,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","inline_featured_image":false,"footnotes":""},"categories":[369,367],"tags":[],"series":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/posts\/14959"}],"collection":[{"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/comments?post=14959"}],"version-history":[{"count":7,"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/posts\/14959\/revisions"}],"predecessor-version":[{"id":21990,"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/posts\/14959\/revisions\/21990"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/media\/14960"}],"wp:attachment":[{"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/media?parent=14959"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/categories?post=14959"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/tags?post=14959"},{"taxonomy":"series","embeddable":true,"href":"https:\/\/www.charityauctionstoday.com\/p\/wp-json\/wp\/v2\/series?post=14959"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}