NTEE Codes: What They Are and How to Change Them

What is an NTEE Code?

The NTEE code is a three-digit code that specifies an exempt organization’s purpose. The National Center for Charitable Statistics (NCSS) developed the National Taxonomy of Exempt Entities (NTEE) coding system as a way to categorize nonprofit organizations. The Internal Revenue Service (IRS) uses this system to classify tax exempt organizations into different categories according to their purpose.

Why is it important?

The NTEE code is a quick way for a potential donor or grantor to know what a charity does at a glance. Grant organizations filter for it in applications, potential donors use it to determine which organizations to consider, and other organizations use it as a way to look for potential partners. In addition, smaller organizations filing the IRS Form 1023-EZ must list their NTEE code on their application for tax-exempt status.

How do you choose one for your organization?

First, you must narrow down which category or categories your organization might belong to. The NTEE classification system divides the universe of nonprofit organizations into 26 major groups under 10 broad categories as follows:

I. Arts, Culture, and Humanities – A

II. Education – B

III. Environment and Animals – C, D

IV. Health – E, F, G, H

V. Human Services – I, J, K, L, M, N, O, P

VI. International, Foreign Affairs – Q

VII. Public, Societal Benefit – R, S, T, U, V, W

VIII. Religion Related – X

IX. Mutual/Membership Benefit – Y

X. Unknown, Unclassified – Z

After narrowing down the categories into which your organization could belong, refer to the instructions for the Form 1023-EZ. A list of all of the possible NTEE codes, sorted by the 26 major groups, starts on page twenty-one. Once you have selected a few possible NTEE codes, The Urban Institute provides a detailed breakdown of each NTEE code so you can be sure you are picking the right one.

It is important for the NTEE code to encompass as much of your organization’s purpose as possible, not just a specific portion of it. Try to stay away from looking at one program, and instead focus on the widest part of the purpose when picking an NTEE code.

How do you change your NTEE code?

If you want to change your organization’s NTEE code, you need to submit a written request to the IRS detailing why the change is necessary. Whether your organization chose the wrong NTEE code initially, or whether the purpose of the organization has changed, it is important to keep the NTEE code up-to-date.

What to include in the letter:

1. Exempt organization’s name

2. Original NTEE code

3. If known, who originally selected the original NTEE Code (i.e., an attorney, the founder)

4. If known, why the original NTEE Code was selected

5. Why it’s necessary to change the NTEE code

6. The desired new NTEE code

To send a letter by mail, address it to:

Internal Revenue Service

Attn: Correspondence Unit

P.O. Box 2508

Room 6-403

Cincinnati, OH 45201

To send by fax (preferred): (855) 204-6184

After the IRS processes your letter, which can take upwards of 90-days, it will notify you if you need to take additional action. If the new NTEE code is a significant departure from the original NTEE code, the IRS may require your organization to file a Form 8940 for re-classification of foundation status.