ALL 501c Organizations are Nonprofit
Why do we have the nonprofit status in the United States? Because 501c organizations serve a unique and valuable service to society by providing representation of professions and industries, charitable activities, education, and other services that improve the lives of people.
Remember the saying, “Many hands make light work?” The great thing about all 501c organizations is that no matter the mission, we make that little piece of the world we serve a better place. By doing that, we make the overall world a better place, and with all the 501c organizations in existence we have a major impact on the world – even if we don’t always see it.
I am kicking off the 2024 Rogue Speak year with one of my favorite diatribes: ALL 501c organizations are nonprofit. The IRS Code incorporates all 501c organizations with the nonprofit status which means that the organization is exempt from federal income tax.
Too often in our own profession I see and hear people use the term nonprofit as if it is separate from associations. IT IS NOT. The subtle differences are clarified in what TYPE OF NONPROFIT your organization is. The most common types are 501c3 (charities and foundations); 501c6 (professional societies and trade associations), and 501c4 (policy-driven organizations that may or may not have members).
Clarity in language is crucial to creating shared understanding and purpose. If we in our own profession do not understand it, how can we expect the world to understand what we do and why it is important? The better approach is to use the correct terms for our nonprofit: charity, foundation, or association. There are 27 501c types listed in the IRS Code – these are all nonprofits of different kinds offering this status to everything from sports leagues to churches to military veterans groups.
Some people say “No, no, no – nonprofit is different from association!” That is not true or accurate. There is definitely a difference between a charity and a trade association, but both are nonprofit. It’s what type of nonprofit you are that differentiates your activities. But one thing I see very clearly: we are a unified profession whether we see it or not.
I have two certifications in nonprofit management: the Certified Association Executive (CAE) and the Advanced Certified Nonprofit Professional (ACNP). The CAE focuses on c6 and c4, while the ACNP focuses on c3. What was confirmed when I earned both is that we have a common body of knowledge, skills, and expertise that is required to do this work and do it well. While we need to understand the nuances of the organization we work with, we are all nonprofit management executives. This creates a balanced understanding and confirms that we are ONE PROFESSION.
I often call for unity in our profession but to have unity we must first have a shared language. And by the way, another thing I want to get off my chest: there is no difference between nonprofit and not-for-profit. That’s happy to glad syndrome. Speaking of happy, I wish you a Happy new year and let the angry postcards begin!
