Are There Differences Between Different Types of Nonprofits?

Absolutely. If you go to the website for the Internal Revenue Service www.irs.gov, you can follow a link to information about Tax Exempt Organizations. Some organizations do not qualify as charities and therefore donations cannot be designated as charitable contributions. Another thing to watch: Unrelated Business Income Tax (UBIT). A key condition is that the nonprofit must use 'substantially all-volunteer' efforts while fundraising, otherwise the nonprofit might be hit with a tax bill for UBIT. Check with your accountant for details.

What types of nonprofits qualify for help? Which do not? Any nonprofit may use the self-publishing tools except for political purposes. In fundraising, some types of organizations qualify as charities while others do not. Determinations are made by the Internal Revenue Service.

Most likely to qualify as charitable donations

Charitable Organizations - 501(c)3
Social Welfare Organizations - 501(c)4
Labor & Agricultural Organizations - 501(c)5
Business League Organizations - 501(c)6
Fraternal Societies - 501(c)8; 501(c)10
Veterans' Organizations - 501(c)19; 501(c)23

Least likely:

Employee Associations
Political Organizations
Social Clubs

In general, there are some basic non-profit organizations that you need to know. They are:

Cooperative - voluntary nonprofit association of people performing some kind of economic activity for the benefit of its members. The three major classes are consumer, service, and producer cooperatives.

Consumer Cooperative - nonprofit association that buys bulk amounts of consumer goods so that its members can purchase at prices below those charges by regular businesses.

Service Cooperative - nonprofit association of consumers dealing with services rather than goods.

Examples include credit unions, and some insurance and credit agencies. A credit union, which is made up of employees from a particular company or government agency, receives its funds from members. In return, members earn interest on their deposits and may borrow money from the credit union. In most cases, they can borrow at better rates and more quickly than they could from for-profit banks or commercial loan companies.

Producer Cooperative - nonprofit association of producers helping members sells or market products. In the US, most coops of this kind are made up of farmers. The coop helps the farmers sell their crops directly to central markets or to companies that use the members' products. Any savings that the producer coop makes in marketing costs go to its members.

Professional Association - nonprofit association of professional or specialized workers seeking to improve working conditions, skill levels, and public perceptions of it profession. Membership can be either mandatory or voluntary.

Trade Association - A trade association is a group of businesses within an industry that work together to build industry awareness, advocate certain political goals and provide services to members. The government watches trade associations rather carefully so that they do not violate collusion and anti trust laws.


RESOURCES:

WWW.IRS.GOV
WWW.ACU.EDU
WWW.ALLIANCEFORJUSTICE.ORG
WWW.SOS.STATE.IA.US
WWW.LOCAL4ALL.COM
WWW.NONPROFITLAW.COM