Nonprofit Organization Overview
A small nonprofit has 20 or fewer staff. A large one has 100+ staff. Yes, a nonprofit can own a for-profit arm. A for-profit entity raises money by offering equity to investors. Traditionally, nonprofits form as nonprofit corporations and apply for 501(c)(3) status.
Crowdfunding platforms allow nonprofits to fundraise without 501(c)(3) status. But donations are not tax-deductible then. Running a nonprofit is demanding. Most employees wear many hats. With massive records and deadlines, work-life balance is tricky. Nonprofits value business skills.
Nonprofit Size Classification
Let’s set industry standards for nonprofit sizes: Small (budget under $5 million), Mid-size ($5-10 million), Large (over $10 million). Segregate program and other expenses in budgets. Staff comprises 60-90% of expenses.
Nonprofit Operations and Funding
Board terms are 1-5 years, set in bylaws. A foundation has corporate/family/individual founders. A nonprofit serves social causes. Nonprofits don’t distribute profits. They provide public benefit. Earnings go to other nonprofits, beneficiaries, or back into the mission. Funding sources include donors, members, grants, and sales. Exempt statuses fall under five categories.