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Traditionally, when starting a nonprofit, the best choice for legal structure is to form a nonprofit corporation at the state level and to apply for 501(c)(3) tax exemption at the federal level.
The Nonprofit Organizational Structure. Each nonprofit organization's structure is a little different, but they all have three core elements: governance, administration, and programs. Within these areas, there will be multiple functions, and all the work should contribute to advancing the nonprofit's mission.
Non-profit organizations include churches, public schools, public charities, public clinics and hospitals, amateur sports organizations, political organizations, legal aid societies, volunteer services, organizations, labor unions, professional associations, research institutes, museums, and some governmental agencies.
501(c)(1): Corporations Organized Under Act of Congress Some examples of this type of nonprofit are Federal Credit Unions, Federal Home Loan Banks, Federal Reserve Banks and Federal National Mortgage Associations. Such a corporation should be an instrument of the United States.
A 501(c) organization and a 501(c)3 organization are similar in designation, however they differ slightly in their tax benefits. Both types of organization are exempt from federal income tax, however a 501(c)3 may allow its donors to write off donations whereas a 501(c) does not.