Just as Baskin Robins touts 31 flavors of ice cream, the IRS has it one better when it comes to nonprofits…
There are five different types of nonprofits. Those five different types of nonprofits include:
- 501(c)(3) charitable nonprofits,
- 501(c)(2) title-holding trust corporations,
- 501(c)(4) community welfare organizations,
- 501(c)(19) veterans organizations and
- 501(c)(6) civic league organizations.
(Think charitable, religious and church, private foundations, and political organizations. Some types of nonprofits even fall under “miscellaneous”, such as Federal Credit Unions.) Within these categories, there are a mind-numbing 32 recognized tax-exempt statuses!
Recently, while working with a community soccer association seeking organization route-finding towards their nonprofit status, I shared that their peers generally fall into the 501(c)(3) Charitable or Educational categories.
A charitable 501(c)(3) organization or charity is an organization whose primary objectives are philanthropy and social well-being.
While an educational 501(c)(3) nonprofit organization is a mission-driven tax-exempt charity that informs and educates the general public or individuals.
To state it a different way, first, ask; What are the public benefits you seek to accomplish through your soccer association? Maybe…
- Youth empowerment?
- Healthy lifestyle?
- Civic pride and cooperation?
- Immigration and/or vocational services?
- Others…
If a charitable by-product of this soccer association’s non-profit mission is to fund providing boots and balls for every U06 (under six years of age) boys and girls team across your geographic “home”. Or to gift every recreational youth club with $XXXX of free professional coaching clinics annually, both could be examples of Charitable philanthropy outcomes.
However, if through this soccer association’s non-profit, in partnership with community healthcare hospitals, they collaborate to help fund educational outreach programs to address and prevent childhood diabetes through proper nutrition and an active lifestyle (involving soccer of course ⚽ ) That could be a valid example of an Educational public benefit non-profit.
Bottomline – start at the ending, (the outcome), in order to gain better clarity on where you should best begin the nonprofit journey.
Wherever you are on the journey, from organizing to marketing to optimizing, consider contacting S3 Solutions for assistance every step of the way.
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