Starting A Non Profit >> What is A Non Profit?
 When
one decides to go into business, they have to first decide if
they are going into business for-profit or for advancement of a
specific cause. The fundamental difference between nonprofit and
for-profit organizations is that nonprofits use their profits to
advance their programs, while for-profits distribute their
profits to their owners or stockholders.
Nonprofit organizations
fall into five main categories – Trade association, charitable
organizations, social clubs, governmental groups and political
groups.
Trade associations are
created to advance a group of people who have an occupation in
common. For example a group of Firemen may come together and
form an association advancing their profession. Trade
associations can also include chambers of commerce and unions.
The second type of nonprofit is
charitable organization. Most charitable organizations
generally demonstrate a generous component. The type of
charitable organization can further de divided into a diverse
category. These could be religious groups, museums,
environmental and educational organizations, libraries, and the
many helping groups. They are also referred to as 501 (c)(3)
organizations, because that is the number of the IRS Code under
which they are described.
The next category is social
clubs. Examples of these could be country clubs and
fraternal organizations.
Governmental groups are
another form of nonprofit organizations. Cities, counties,
state, and federal agencies can form these types of nonprofits.
The last category is political
groups. These are generally organized to promote certain
policies, issues, or candidates for political office.
Whatever the category of your
nonprofit, the primary objective is to support some issue or
matter of private interest or public concern (such as the arts,
charities, education, politics, religion, research, or some
other endeavor) for non-commercial purposes. Your nonprofit or
501(c)(3), which be exempt from income and (sometimes) property
tax, and able to receive tax-deductible charitable
contributions. Before you spend your money, at least consult
with an attorney who is experienced in the area of nonprofit
law so that you do not make one of the many major mistakes that
people make when they try to incorporate by themselves.
|
