What are the Different Types of Nonprofits?

The rules governing nonprofit advocacy differ depending on the type of nonprofit that wants to conduct the activity. While there are many types of nonprofit organizations, three main types of nonprofit organizations discussed below include 501(c)(3) public charities, 501(c)(4) social welfare organizations, and 527 organizations (frequently referred to as political action committees).

The types of nonprofit corporations with which most of us are familiar with are religious organizations and so-called public benefit corporations. Public benefit corporations are those that serve a scientific, literary, education, artistic or charitable purpose that benefits the public. In the nonprofit world these are known as "501(c)(3)'s." This number refers to the section of the Internal Revenue Code under which public benefit corporations may be organized.

Using 501(c)(3)'s as our example, we will briefly explore the unique conditions and needs of nonprofit corporation. For example, most public benefit corporations survive on a combination of donated or granted income, donated facilities and equipment, and low paid or volunteer staffs. In other words, their base activities do not generate sufficient income to meet their financial needs. Frequently they are struggling just to survive.

The Internal Revenue Code allows for tax-exempt status for many types of organizations which operate for various nonprofit purposes. Generally, no part of the net earnings of such organizations may inure to the benefit of any private individual or shareholders or the organization.