What’s the difference between an association and a nonprofit?

Mission-focused organizations:

Most “nonprofits” are charitable organizations with a specific mission focus.

Associations are generally membership organizations, with the primary focus of providing services and benefits to members of a specific group (e.g., a professional association, trade group, industry-specific association).

IRS Tax Designation 501(c) 3:

This is the IRS tax-exempt designation given to religious, educational, charitable and other organizations focused on mission fulfillment.

IRS Tax Designation 501(c) 4 or 501(c) 6:

While some associations are tax exempt, more are given this IRS tax designation to identify them as professional associations that are not tax-exempt.

Headed by an executive director:

Most nonprofits have an executive director and CEO hired by the board to run the organization.

Executive Director might oversee multiple associations: 

For many associations, it’s common that their executive director has a certification called “AE” (Association Executive). Sometimes, the executive director runs multiple associations as part of an association management company (AMC) hired by associations to handle their back-office operations.

Staff size ranges from small to large:

Depending on the size of the nonprofit, the staff size can fall into a range similar to that of businesses or corporations.

Staff sizes tend to be small:

For many (but not all) associations, the staff tends to be smaller than nonprofits or corporations. Associations run by an AMC might have a few staff members, but they are most likely shared across a number of associations also managed by the AMC.

Board members & officers elected by the board:

For most nonprofits, the board has the power to elect its own members and officers.

Board Members & Officers elected by the membership:

Board elections are large events where every member of the association has the opportunity to vote for the new slate of directors and officers.

Board & officer terms vary:

For many nonprofits, board terms and the election of officers might not be regulated; even if there are guidelines in the bylaws, they might not be adhered to rigorously.  Mostly, this happens because nonprofits often struggle to find qualified candidates to serve on the board, or to fill officer roles. Board seats could be open, sometimes for years at a time.  Board members or officers often serve in the same role for many years.

Board & officer terms are well defined:

Since board members and officers are elected by the membership, the terms are clearly defined, and board seats can become competitive (with multiple candidates vying for the same seat). It’s rare for an association’s board to have open seats for any reason other than an unexpected board member departure. Officerships are seen as prestigious, and possibly highly competitive, positions.

Board members are from diverse backgrounds, representing a cross-section of stakeholder interests:

Board composition in the nonprofit sector focuses on building a group of highly skilled professionals who can represent the interests of the organization’s stakeholders appropriately.  There is a strong focus on diversity and on finding the best “fit.”

Board members come from the membership and are leaders who win an election cycle:

Because association boards most often are elected by the membership, there is less emphasis on building a diverse bench of qualified candidates. The focus is on electing leaders who will appropriately represent the interests of the membership.

For many nonprofits, changes to bylaws and policies can happen in a straightforward way.  A committee — usually the Governance Committee — suggest changes to the bylaws or policies and the board votes on the changes.  The changes are then filed with the state of incorporation of the nonprofit.

Bylaws and policies might require membership approval, and are done less frequently:

Because associations are membership organizations, any bylaws changes would require a period for member discussion and review, and potentially a vote by the membership. Bylaws and policy changes are done more formally and less frequently than at other nonprofits.