There are three main types of charitable organizations in the United States: public charities, private foundations and private operating foundations. The corporation is the most common, and usually best, form for a nonprofit organization, which are sometimes referred to as non-stock corporations, or 501(c)(3) organizations. Nonprofits are exempt from federal income tax if they meet requirements, but typically must pay employment taxes for hired staff. Nonprofits aim to maximize revenues for the causes they support through operating activities.
In the U.S., over 1.6 million nonprofits have tax-exempt status from the IRS. Public charities, foundations, social advocacy groups, and trade organizations are common types that cannot distribute profits. The federal tax code recognizes over 30 types of nonprofits, which are either fully or partially tax-exempt and can accept contributions. As separate legal entities from employees, nonprofits are usually managed by boards of directors or members and must be formed based on state rules.
Public charities include schools, hospitals, churches, colleges, universities and medical research organizations. They have an active fundraising program and receive funding from many sources, including income from conducting exempt activities.
Social advocacy groups lobby or promote some sort of social or political effort. Examples include Greenpeace, NAACP, ACLU, and the National Organization for Women.
501(c)(3) charities are the most popular type of nonprofit. There are more than 1.5 million registered charitable organizations in the United States. 501(c)(3) organizations are funded primarily through charitable donations and government grants.