Non-profits do not distribute profits to members. They reinvest surpluses to further social or charitable causes. Non-profits aim to benefit society, not owners. Both entities earn revenue and require sound finances. Non-profits enjoy tax exemption and often have access to public and private grants. But they lack equity participation. Reviews of non-profits exist at websites like grantspace.org.
The Operation and Structure of Non-Profit Organizations
Non-profits operate like businesses, earning profits which they reinvest per mission. Not-for-profits are recreational groups run by volunteers. Non-profits get 501(c)(3) status from the IRS. They are legal entities formed under state laws to serve the community, not generate profit.
Financial Responsibilities and Liability of Non-Profit Organizations
Non-profit members cannot be held liable unless acting as agents. To limit liability, non-profits should follow business judgement rule, document decisions, get adequate insurance, and incorporate. Though non-profits do not aim for profits, they must be financially responsible like businesses. Support comes from donations and grants.
Starting a Non-Profit Organization
Incorporating a non-profit can be complicated. Non-profits are incorporated businesses operating for purposes other than profit. If you aim to give back to the community, a non-profit corporation may suit your needs.