The North American Industry Classification System (NAICS) assigns codes to businesses and organizations based on their primary activities. While it is widely used for for-profit companies, nonprofits also benefit from these codes for a variety of purposes, such as applying for grants, bidding on contracts, and benchmarking their performance.
Why Your Nonprofit Needs a NAICS Code
Grant Applications and Funding: Government agencies, foundations, and other grant providers often require a NAICS code when processing funding requests. The code helps categorize your nonprofit’s work, streamlining the application process and ensuring you’re matched with appropriate grants.
Contract Bidding: Nonprofits that provide services to government agencies may be required to have a NAICS code. Without one, you might miss out on opportunities to secure federal, state, or local contracts.
Tax Filings and Exemptions: Although tax-exempt, nonprofits are often required to submit detailed filings with the IRS. Having a NAICS code simplifies the process and helps nonprofits identify relevant tax exemptions or credits based on their activities.
Data and Industry Research: NAICS codes allow nonprofits to track industry data, trends, and benchmarks. This information can be crucial for strategic planning, allowing you to measure your organization's impact and growth in comparison to similar entities.
Partnership and Collaboration Opportunities: Using the right NAICS code makes it easier to find other organizations with similar missions and goals. For example, nonprofits focused on education, healthcare, or environmental sustainability can use their NAICS code to identify potential partners for collaborations, joint ventures, or campaigns.
Common NAICS Codes for Nonprofits
Several NAICS codes are frequently used by nonprofit organizations, depending on their primary purpose:
813110: Religious Organizations
813211: Grantmaking Foundations
813311: Human Rights Organizations
813319: Other Social Advocacy Organizations
813410: Civic and Social Organizations
Each code helps classify the organization's activities, ensuring that it’s categorized correctly for government reporting, grant applications, and business analytics.
Does Instant Nonprofit Assign NAICS Codes?
While Instant Nonprofit provides comprehensive services to help form and maintain your nonprofit, it does not assign NAICS codes for you. Assigning a NAICS code is a process that your nonprofit will need to handle on its own. You can easily choose the code that best represents your primary activities by using the NAICS lookup tool online or visiting the official NAICS website.
When forming your nonprofit with Instant Nonprofit, our services include IRS 501(c)(3) approval, state incorporation, and governance setup, but obtaining a NAICS code is up to you, based on the specific activities your nonprofit will engage in.
How to Get Your NAICS Code
To get your nonprofit's NAICS code, simply visit the official NAICS website and use their lookup tool. The process is straightforward—you’ll select the industry that aligns with your nonprofit’s mission and focus. Once you’ve determined the best fit, you’ll be able to use the code for any necessary filings, grant applications, or business research.
Final Thoughts
Using a NAICS code may not be the first thing that comes to mind when starting a nonprofit, but it’s a critical tool for optimizing your organization’s operations. Whether it’s for grant applications, tax filings, or government contracts, having the right NAICS code ensures that your nonprofit is categorized correctly and positioned for future opportunities.
At Instant Nonprofit, we guide you through every step of the nonprofit formation process, but obtaining your NAICS code is something you’ll need to do yourself. If you’re unsure which code to choose, consult the NAICS website or reach out to a professional for advice.
For more information about forming a nonprofit, visit our website or contact our support team through the chat bot on your lower right. We’re here to help you navigate the nonprofit world with ease and success!