Private and Public Charities
By far the largest group of nonprofit organizations in the United States are those organized under section 501(c)(3) of the tax code. This section applies to "religious, educational, charitable, scientific, literary, testing for public safety, to foster national or international amateur sports competition, or prevention of cruelty to children or animals organizations," according to the Internal Revenue Service. These organizations are further subdivided by whether they are run by private individuals or by a public, government organization. Organizations that fall under section 501(c)(4) of the tax code may have similar purposes, but are allowed to participate in political lobbying in ways that 501(c)(3) organizations are not.
Nonprofits Created by Government Act
Section 501(c)(1) of the tax code applies to nonprofit organizations "created by act of Congress." A well-known example is federally-chartered credit unions, which are authorized by Congress, but act as independent nonprofit organizations that focus on providing services to members rather than paying shareholders. Credit unions chartered by states are covered in section 501(c)(14). State-sponsored workers' compensation associations fall under section 501(c)(27).
Beneficiary Societies and Organizations
Many types of groups, including teachers, veterans, and government workers create associations that allow group members to participate in retirement or insurance plans, or to purchase legal services at discounted rates. These associations are often nonprofit organizations organized under one of several different subsections of section 501(c), depending on what sort of group is involved. For instance, teachers' retirement fund associations fall under subsection 501(c)(11), while organizations for veterans typically fall under subsection 501(c)(19).
Some types of cooperatives, or co-ops, fall under sections of the tax code other than section 501(c). For instance, cooperative hospital service organizations are granted tax-exempt status under section 501(e) of the tax code. Cooperative educational or service organizations are governed by section 501(f), while cooperative farm associations are covered in section 521(a).