Examples of nonprofit organizations include hospitals, universities, national charities, churches, and foundations. A membership organization elects the board and has regular meetings and the power to amend the bylaws. A board-only organization typically has a self-selected board and a membership whose powers are limited to those delegated to it by the board. The National Association of Parliamentarians has generated concerns about the implications of this trend for the future of openness, accountability, and understanding of public concerns in nonprofit organizations.
However, keep in mind that the IRS receives more than 95,000 applications for tax-exempt status each year. Nonprofits that don’t follow the rules for 501(c)(3) status may receive fines, penalties, and loss of tax-exempt status. For example, charitable organizations must exist for one of the reasons listed above. To apply for 501(c)(3) status, an organization must meet certain eligibility requirements and submit an application to the IRS using either Form 1023 or Form 1023-EZ.
Foreign activities
501(c)(3) organizations are also eligible for grants from foundations, corporations, and government agencies. This can be a valuable source of funding for non-profit organizations, especially those that are just starting out. Perhaps the most significant advantage is the tax-exempt status that comes with being a 501(c)(3) organization. This means that the organization is exempt from paying federal income taxes, as well as potential exemptions from state and local taxes. An organization can be classified as a 501(c)(3) nonprofit if it meets certain criteria outlined in section 501(c)(3) of the Internal Revenue Code and is therefore eligible for tax exemption. A 501(c)(4) nonprofit has more leeway to participate in biased political or lobbying activities than some other nonprofit types, such as 501(c)(3)s.
Nonprofits may also exist to collect income to dispense to other qualifying charities. A private foundation is typically held by an individual, a family, or a corporation 5013c definition and it obtains most of its income from a small group of donors. Private foundations are subject to stricter rules and regulations than public charities.