“Nonprofit” can mean a lot of things. It can mean a church or a school, a club or a fraternity. It can mean a quasi-governmental organization. It can mean, very generally, any tax exempt organization — or it can be the punchline of a bad joke about a business that’s not doing very well, as in “I run a non-profit record store.”
Three types of organizations fall into the category of 501(c)(3) nonprofits: private foundations, churches and public charities.
While some private foundations are set up for purposes other than philanthropy, many are established by an individual, a family or a group to pursue charitable ends. Foundations generally do not solicit funds from the public, and their programs are guided by their trustees or directors.
“Churches” is the umbrella term used by the IRS to designate qualifying worship organizations. Unlike other types of 501(c)(3)s, churches are not required to file any tax documents, regardless of revenues, though many do file voluntarily. Because of this inconsistency in reporting, churches are difficult to summarize as a category.
Public charities are nonprofits that usually derive their funding or support primarily from the general public, receiving grants from individuals, government and private foundations. The term “charity” can be a bit misleading, however. While nonprofits are generally working for what they see as the public good, they are not necessarily direct relief organizations. Many function more like a business than anything else; Mission Health, with over 10,000 employees and upwards of $1 billion in annual revenue, is an example of a nonprofit that generates big money while also providing some charitable services.
For each of the charts and graphs in this section (unless otherwise noted), a nonprofit is defined as a 501(c)(3) IRS recognized tax exempt organization, donations to which are tax deductible, that is not also a house of worship (church, synagogue, mosque, etc.) or a simple association of people like a small club. The data presented here are the most recent available from the IRS, and the numbers are drawn from (2012) tax documents.