Nonprofits Explained: The Four Categories

Key Takeaways

in this video we will distinguish between direct service agencies and advocacy organizations and describe the four General types of nonprofit organizations now there are thousands of different types of nonprofits out there so it's kind of hard sometimes to categorize them into certain buckets so here's what we're going to do we're going to first classify them as either direct service or advocacy organizations let's start first with direct service agencies these are nonprofits that provide that Hands-On service to either individuals or communities some examples might be a food bank distributes food directly to people who are in need these organizations are focused on immediate impact and they're directly providing services so they're delivering these Services directly now on the other hand advocacy organizations are those that aim to raise public awareness and or push for policy reform their focus isn't on that tactical program delivery but rather systemic change at a broader level they often engage in activities like lobbying for new laws organizing public awareness campaigns or influencing government decisions while advocacy organizations might not provide that Hands-On direct Service delivery their long-term goal is to create social change by influencing public policy now it's important to note some nonprofits do both they provide Direct Services while also simultaneously advocating for broader policy change for example a healthcare nonprofit might offer Medical Services but at the same time they advocate for healthc care policy reform so now that you know those two kind of broader categories of nonprofits let's move on to four General types of nonprofit organizations first you have private foundations these are nonprofits that are typically funded by a single individual family or Corporation private foundations primarily focus on making grants to other nonprofits rather than providing Direct Services themselves great example of this that's really well known is the Bill and Melinda Gates Foundation next we have public Charities this is the most common type of nonprofit and it includes organizations like hospitals schools and churches among others public Charities rely on donations from the public and they often provide Direct Services to communities in need the third category and this one's going to sound weird but it's the non-charitable nonprofit say what a nonprofit that's non-charitable well let me explain these organizations operate as nonprofits but they don't engage in charitable activities examples of this include trade associations and Social Clubs they serve their members but they're not serving the general public they're not providing charitable services and the fourth category political nonprofits these nonprofits focus on influencing legislation and policy change they are often advocacy organizations that engage in political activities such as lobbying or campaigning for specific issues an example is the ACLU which is the American civil liberties Union so now that you know the different types of nonprofits and categories I want you to think of a nonprofit or if you work at a nonprofit I want you to think about it how would you categorize it is it a direct Service Agency an advocacy organization or combination of both and of those four General types of nonprofits where would it fall is it a private Foundation a public charity a non-charitable nonprofit or a political nonprofit