Can You Answer 3 Simple Questions on Nonprofits?
While I was strolling through a local national bookstore, I couldn’t find a simple book about the history of or the function of nonprofits. As I asked around, no one could find that type of book. All the books were about fundraising or nonprofit management. So it made me think about some fundamental questions about nonprofits.
Q1. What’s a nonprofit?
Q2. Is a nonprofit a business?
Q3. Are all nonprofits the same?
Before you jump to the answers, be mindful that you see nonprofits every day. As a kneejerk reaction, one might not be able to think of any. Here are some reminders:
- Public school – all public schools are nonprofits.
- Charter schools – often hold a different tax exempt classification.
- Churches – religion is categorized as a nonprofit.
- Foundations – they have different restrictions, and are much harder to sustain as nonprofits if they are smaller and newer; but still a nonprofit.
- Government – every elected official, neighborhood parks, city or county building you pass, or road you drive on is supported by a nonprofit structure.
- Social Clubs – Rotary, Kiwanis, and Girl Scouts are all good examples of nonprofits.
- Hospitals – the majority of hospitals are nonprofits.
The following are the answers:
#1 – Answer: An organization that offers services for no or little cost. No excess revenue goes to an individual. By law, they don’t pay federal taxes and can receive public donations. They benefit the community by providing various and/or specific items and/or service(s).
#2 – Answer: Yes, nonprofits are a business.
#3 – Answer: No, not all nonprofits the same. There are approximately 20 types of 501c statuses. The majority would fall under a category of 501c3.
The moral of the story, don’t take nonprofits for granted. Most of them exist because of a community need. In most cases, it’s not profitable for a for-profit business to take its place. Therefore, I believe nonprofits are the glue that keeps humanity kind, caring, and giving. Without them, what would be left?
For more information on nonprofits, click here: http://www.irs.gov/Charities-&-Non-Profits.
I write this because my business is personal. My struggles are for your gain. No strings attached.
Nathan A. Webster, MBA
September 16, 2018
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