The origins of the tax-exempt sector in the United States predate the formation of the republic. Absent an established Governmental
framework, the early settlers formed charitable and other “voluntary” associations, such as hospitals, fire departments, and orphanages, to confront a wide variety of issues and ills of the era.
These types of voluntary organizations have continued to thrive in the
United States for centuries. In 1831, during his historic visit to the United States, Alexis de Tocqueville observed:
“Americans of all ages, conditions, and dispositions
constantly unite together. Not only
do they have commercial and industrial associations
to which all belong but also a thousand
other kinds, religious, moral, serious,
futile…Americans group together to hold
fetes, found seminaries, build inns, construct
churches, distribute books…They establish
prisons, schools by the same method…I have
frequently admired the endless skill with
which the inhabitants of the United States
manage to set a common aim to the efforts of
a great number of men and to persuade them
to pursue it voluntarily.”
Voluntary associations comprised two distinct types of organizations—public-serving and member-serving. Early public-serving, or charitable,
organizations included schools, churches, and other voluntary organizations designed to provide services to the public. The popularity of voluntary charitable organizations in the United States, even in the midst
of strengthening State and Federal governments, suggests that perhaps these organizations, with their well-established structures and programs, were able
to fill a gap in social welfare programs where the young Government’s efforts proved insufficient.
http://www.irs.gov/pub/irs-soi/tehistory.pdf
