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Starting A Non Profit >> What is A Non Profit?


What is A Non Profit?


What's A Non ProfitWhen 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.

 

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