While I.R.C. § 501(c)(3) organizations must advance a charitable purpose such as religion, education or public assistance, I.R.C. § 501(c)(6) nonprofit associations typically help small businesses advance their industry or business community. To qualify for the tax exemption allowed under § 501(c)(6), a nonprofit’s entire earnings must be reinvested into the organization and may not benefit any individual member or shareholder.

The Tax Code provides that certain types of organizations qualify as § 501(c)(6) organizations, including business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues, not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.