by leah norris kelley heaslip jackie faulkner and megan heverly n.
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By: Leah Norris, Kelley Heaslip, Jackie Faulkner, and Megan Heverly. Why Non-profit?. Wouldn’t you want to put your revenues to good use?

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why non profit
Why Non-profit?

Wouldn’t you want to put your revenues to good use?

With a non-profit organization, surplus revenues are used to achieve goals rather than to distribute them as profits or dividends. This does not mean that the organization is not trying to make a profit; instead, it means that the organization has no owners and that the funds will not be used to benefit any of the owners. (Note: surplus revenues and use of surplus revenues may be restricted)

You can be on the controlling board for your organization! It is your choice whether you pay your staff or employ volunteers who work without compensation. Although there is a token fee, it is used to meet legal requirements between the executive and the organization’s contract.

objectives goals and formations
Objectives, Goals, and Formations

Some non-profit organizations can be charities, organized as a corporation or as a trust. “Supporting organizations” operate like foundations, but their goal is to give value to the groups of people they administer to rather than to give wealth.

In the US, non-profits are formed by filling bylaws / articles of incorporation in the state they are established. This allows non-profits to be treated as corporations, enter business dealings, form contracts, and own property.

types of non profits
Types of Non-Profits

-Non-profits can have a trust of members, controlled by its members who elect the board of directors, board of governors, or board of trustees. Two types of non-profit: membership and board-only.

-In the US, non-profits can be exempt from federal income taxes if they meet the requirements set forth by the Internal Revenue Service.

501 c

The American tax-exempt nonprofit organization. 29 types of non-profit organizations are exempt from some federal income taxes.

disadvantages of non profits

Disadvantages of non-profits

There can be surplus revenue, but can only be used to further the organization and it’s goals

The organization cannot have any owners and therefore funds do not benefit any owners.

Often, people working for non-profits are unpaid volunteers or people working long hours for little pay, so there are problems keeping employees.

Not-for-profit organizations have to rely on government funding and charitable donations, which are unreliable sources

NPOs often experience “Founder’s syndrome,” where the founder of the organization wants to further his or her own goals and dreams, while donors and employees have a different vision for the NPO.

  • Organizations that qualify as public charities are eligible to apply for tax exemption status, which allows them to avoid paying income taxes. to be exempt from federal taxes, an organization must fall under the description of section 501(c) of the Internal Revenue Code.
  • They are allowed to receive charitable donations from the public. (Habitat for Humanity, American Red Cross)
  • The original mission of the organization is put above the personal interests of its founders.
  • The founders, members, directors, and employees are not personally responsible for any debts the foundation may have.
the american red cross
The American Red Cross

This non-profit organization formed in 1881 and founded by

Clara Barton who was involved in the International Red Cross. Currently the ARC provides disaster relief, emergency assistance, and education in America. They hold many blood drives and many informative classes which cover topics like lifeguarding, babysitting and CPR. Overall, the American Red Cross Organization is successful in saving lives and providing hope. If they were a profit organization the dynamic would change and it would become less about those in need and more about the income.The classes would become more expensive and some may not be able to afford it, and these classes can save lives.

the foundation for peace
The Foundation for Peace

Founded by Alberto and Rosalina Martinez in 1962, the FFP is a non-profit organization that builds schools, water-purification facilities, and churches in the Dominican Republic, Haiti, and Kenya. The employees are volunteers and the funds made by the child-sponsorship program go toward paying school tuition and teacher salaries. Every year, the FFP collects donations of furniture, medical supplies, and vehicles. the costs for mission trips also benefit the goals of the organization.