Archive for the ‘Legal’ Category

I’m reposting this entry from January 2008, because this question has come up several times this week.

Too often I hear people referring to ALL nonprofit organizations as a 501(c)3 and they are not. So, I thought it would be beneficial to list the various types of nonprofits.

Here is a list from Internal Revenue Services of the types of nonprofit organizations:
501(c)(1) — Corporations organized under acts of Congress such as Federal Credit Unions
501(c)(2) — Title holding corporations for exempt organizations
501(c)(3) — Various charitable, non-profit, religious, and educational organizations (see below)
501(c)(4) — Various political education organizations (see below)
501(c)(5) — Labor Unions and Agriculture
501(c)(6) — Business league and chamber of commerce organizations (see below)
501(c)(7) — Recreational club organizations
501(c)(8) — Fraternal beneficiary societies
501(c)(9) — Voluntary Employee Beneficiary Associations
501(c)(10) — Fraternal lodge societies
501(c)(11) — Teachers’ retirement fund associations
501(c)(12) — Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies and like organizations
501(c)(13) — Cemetery companies
501(c)(14) — Credit Unions
501(c)(15) — Mutual insurance companies
501(c)(16) — Corporations organized to finance crop operations
501(c)(17) — Employees’ associations
501(c)(18) — Employee-funded pension trusts created before June 25, 1959
501(c)(19) — Veterans’ organizations
501(c)(20) — Group legal services plan organizations
501(c)(21) — Black lung benefit trusts
501(c)(22) — Withdrawal liability payment fund
501(c)(23) — Veterans’ organizations created before 1880
501(c)(25) — Title-holding corporations for qualified exempt organizations
501(c)(26) — State-sponsored high-risk health coverage organizations
501(c)(27) — State-sponsored workers’ compensation reinsurance organizations
501(c)(28) — National railroad retirement investment trust
501(d) — Religious and Apostolic associations
501(e) — Cooperative hospital service organizations
501(f) — Cooperative service organizations of operating educational organizations
501(k) — Child care organizations
501(n) — Charitable risk pools
521(a) — Farmers’ cooperative associations
527 — Political organizations

To get more detailed information go to http://www.irs.gov/pub/irs-pdf/p557.pdf pages 60 and 61 give you an Organizational Reference Chart. It is a very handy tool when deciding what type of nonprofit you are starting.

The Sarbanes-Oxley Act was enacted in 2002 in response to scandals involving several public corporations such as: Enron, Tyco International, and WorldCom just to name a few. The reason why this is important to your nonprofit is that it is a public company, and is therefore subjected to the regulations within the Sarbanes-Oxley Act.

Now, I’m neither a lawyer nor accountant, so this blog post is in no way giving you advice. However, my intention is to expose you to websites that will assist you in increasing your understanding of this Act. Thus, I think it is always best to start at the beginning, and here is the full Act. Then next I would just visit a few blogs to see what people are saying.

Happy reading!