Introduction
All district coalitions and nearly all neighborhood associations are structured as nonprofits. Some are Oregon state level nonprofits and others are tax-exempt organizations that have 501(c)(3) status. This lesson will navigate the types of Oregon nonprofits, and speak to a few of the types of charitable organization filing categories focusing on 501(c)(3).
What are the Different Nonprofit Legal Structures?
State level
The following definitions are from the Oregon Secretary of State’s website
- Public Benefit – Public benefit corporation includes entities which hold tax-exempt status from the Internal Revenue Service under Section 501c(3) and other groups organized for public or charitable purposes. Public benefit nonprofit corporations must include a clause in their articles of incorporation stipulating that, on dissolution of the corporation, its assets will be distributed to another entity organized for a public or charitable purpose, to a religious corporation, to the United States, to a state, or to an organization which is tax exempt under Internal Revenue Code Section 501c(3). Examples of public benefit nonprofit corporations include charities, social service organizations, schools, foundations, and scientific and research organizations.
- Mutual Benefit – Mutual benefit corporations include all other nonprofit corporations which are not classified as public benefit or religious corporations. Mutual benefit corporations are typically organized for the benefit of the organization’s membership. Examples of mutual benefit nonprofit corporations include social clubs, business leagues and veterans groups.
- Religious – Religious corporation includes those corporations organized primarily or exclusively for religious purposes. Examples of religious nonprofit corporations include synagogues, churches and other places of worship.
Federal level
- Over 20 different types
- Most common are
- 501(c)(3) Charitable Organizations are those which are organized and operate exclusively for exempt purposes, which are set forth in section 501(c)(3). More here.
- 501(c)(4) Social Welfare Organizations must not be organized for profit and must be operated exclusively to promote social welfare. More here.
- 501(c)(6) Business Leagues include chambers of commerce, real estate boards, boards of trade, and professional football leagues. They are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual. More here.
Why 501(c)(3) is special and the most sought after
- Tax-exempt
- Donors can take a tax deduction
- Eligible for receiving grants