There are nuances to both of these, but the idea is to ensure that each type of organization has guidelines for its activities which match the purpose and mission of the nonprofit.
There are other differences, as well, which can be learned through research on the American Society of Association Executives (asaecenter.org) or other association-focused resources.
Here is the summary published by the IRS for the 501(c)3 classification: To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.
The laws for such associations continually evolve to address important legal and socioeconomic matters.
Associations and all owners therein are subject to state statutes enacted for the particular form of community.
Particular laws apply to financial requirements, construction defects and other matters concerning the developer of associations with applicable deadlines and various statutes of limitations.
718.301(4)(c)(90-day deadline following turnover of control for the developer of a condominium to pay for and provide an independent audit of the financial records); e.g., Fla. Stat.
Even a conversion of an older building to condominium can subject the developer to providing warranties to its owners.
There is a growing trend for developers to choose to construct or convert buildings to non-residential commercial offices.