When organizations apply for recognition of their exempt status from the IRS—go through the IRS registration process—they complete either an IRS Form 1023 or Form 1024. As part of that process, they were asked to indicate up to three primary areas of activity using the IRS Activity Code system.
The National Center for Charitable Statistics (NCCS) has developed the Nonprofit Program Classification (NPC) system for classifying program services and beneficiaries for the NCCS/GuideStar digitized database of IRS Forms 990. The system should serve all potential users of the NCCS/Guidestar database, ranging from researchers to donors.
Obtaining meaningful information about a group of organizations so diverse yet so vital to society becomes impossible without a classification system that groups similar entities by purpose, type, or major function.