U.S. Social Sector Dashboard

Most people think of charitable organizations when they hear the word “nonprofit.” Also sometimes referred to as public charities or 501(c)(3)s, these organizations primarily run programs to help their communities and causes. Per the IRS Code, they may not engage in partisan political activities. Examples include the American Red Cross, a local food pantry, donor-advised fund (DAF) providers, and nonprofit hospitals.

This term includes two types of U.S. charitable organizations that are a subset of 501(c)(3)s that make grants. Private foundations are founded by and receive support from a small number of individuals or corporations. Community foundations are public charities that receive support from the general public to award grants. Examples include the Ford Foundation, Tulsa Community Foundation, and the California Endowment.

Also known as 501(c)(4)s, these groups are organized to promote the common good instead of a specific group. They can engage in unlimited lobbying and attempt to influence elections. Donations to social welfare groups are not tax deductible. Examples include the National Rifle Association, American Civil Liberties Union, and AARP.

501(c)(6)s promote common business interests among a community. These may not focus on performing services for members, only for the community. They may engage in some political activities. Examples include the American Board of Ophthalmology, California City Chamber of Commerce, and LGBTQ+ Real Estate Alliance.

501(c)(7)s are membership groups like sororities, fraternities, hobby clubs, or country clubs. They don’t have to support a charitable cause, but they must be organized for social and recreational purposes and may not generate a profit. Examples include Alpha Gamma Delta, Maryland Geocaching Society, and New York Athletic Club.

501(c)(5)s are labor, agricultural, or horticultural organizations that improve working conditions, product quality, or efficiency. These organizations may engage in some political activity. Examples include the United Steelworkers, the Maryland Soybean Board, and the Writers Guild of America West.

Fraternal societies are tax exempt under 501(c)(8) or 501(c)(10) of the IRS code, and they operate under a “lodge” system where a parent organization oversees local branches. 501(c)(8)s provide insurance benefits to members, whereas 501(c)(10)s donate proceeds to charity. Examples include the Knights of Columbus, the Croatian Fraternal Union of America, and Catholic Life Insurance.

These are groups that have not gone through the process of being formally recognized as nonprofits but play an important role in the civic life of their communities. Examples include mutual aid societies, neighborhood associations, and informal music clubs.

The IRS doesn’t have a formal definition of cooperatives, but these companies are typically governed democratically on a one-member/one-vote basis, and any remaining revenue after expenses is paid to its members. Examples include food co-ops, agricultural co-ops like Land O’Lakes, and insurance cooperatives like Liberty Mutual.

Social businesses are enterprises created and designed to solve a social problem. These businesses are financially self-sustaining but exist to produce social impact, so profits are reinvested in the business rather than paid to shareholders. Examples include Grameen Bank, Solar Sister, and TOMS shoes.

These tax-exempt groups include political parties, candidates, committees, or associations aiming to influence policies or elections. A subset of them, such as political action committees (PACs), may accept unlimited donations and are not subject to spending limits. Examples include the Democratic and Republican National Committees, the National Association of Realtors PAC, and Save America PAC.

These organizations don’t fit neatly into either nonprofit or government sectors. They may include an organization that’s a registered nonprofit but is run by a board of government officials. In some cases, they may not be part of the social sector. Examples include the National Park Foundation, many utility companies, and Fannie Mae.