There are many different types of civic organizations in the U.S., including charities, welfare organizations, labor unions, business unions, and political organizations. Non-profit organizations that devote their resources to charitable, religious or educational purposes are eligible to claim tax exemption under Section 501(C)(3) of the Internal Revenue Code. These organizations can engage in a wide range of advocacy issues, but they are restricted from lobbying and are prohibited from engaging in any political activity, whether on behalf of or against a candidate for public office.
Community-based organizations that do not wish to have their lobbying activities restricted may register as social welfare organizations under section 501(C)(4) of the Internal Revenue Code. Donors’ donations to such organizations are not exempt from taxation. Moreover, these organizations may engage in partisan political campaigning, but only as a secondary activity. A helpful explanation of the differences between these categories of organizations can be found here.
Funding
Budgets for civic organizations can be in the thousands or billions of dollars, depending on their size and scope of activity. Most community organizations build their budgets through fundraising. Funding for civic organizations comes from a number of sources: private donations, membership fees, sales of goods and services, and grants from international agencies or governments.
A typical example is the Yellowstone Park Foundation, which is an NGO that serves as the official fundraising partner for Yellowstone National Park in the American West. More than 16,000 individuals, corporations and foundations donate to the foundation each year. The purpose of the foundation is to fund programs to protect, preserve and enhance natural and cultural resources and to introduce visitors to Yellowstone Park. The Foundation receives 52% of its income from individuals, 21% from gifts from corporations, 21% from gifts-in-kind, and 7% from other sources (grants from government and foundations, and income from investments). Donations do not have to be large – many community organizations in the U.S. ask citizens to donate as little as $10, $25, or $50.
Different levels of government also provide funding to community organizations, especially those involved in service delivery. For example, the government in the U.S. funds a variety of services for victims of domestic violence, such as transitional housing, counseling, and a domestic violence hotline.
Donations to community organizations registered under section 501(C)(3) of the U.S. Internal Revenue Code are tax-exempt. This tax policy encourages Americans to support community organizations.
International NGOs and International Funding
Foreign civil society organizations operating in the United States range from the German Goethe Institute, which promotes study abroad of the German language and Germany and encourages international cultural exchanges, to the network of Confucius Institutes, which provides information on Chinese education, culture, economy and society. Another example is the Hitachi Foundation, based in Japan, which focuses on strengthening communities in the U.S. through programs such as the Business and Jobs program aimed at improving the lives of underserved Americans. Since 2007, the European Instrument for Democracy and Human Rights (EIDHR) has supported key lobbying actions in favor of abolishing the death penalty in Illinois and Maryland. The European Commission acts as one of the largest donors of development projects in the world, and dozens of American civil society organizations submit project proposals to the European Commission for funding. All of Germany’s party institutes also work in the United States.