Types of Nonprofit Organizations
- Section 501(c)(4): Civic leagues and social welfare organizations, homeowners associations, and volunteer fire companies.
- Section 501(c)(5): Labor unions.
- Section 501(c)(6): Chambers of commerce.
Examples of Nonprofit Organizations
- Amnesty International
- Better Business Bureau
Financial Statements for Nonprofit Organizations
There are 4 main financial statements for non-profit organizations:
- Statement of Financial Position
- Statement of Activities
- Statement of Cash Flows
- Statement of Functional Expenses
Purpose of Nonprofit Organizations
The purpose of non-profit corporations is to make people’s lives better in their society, state, country, or around the world. Non-profit organizations are not dedicated to private or financial gain but to advancing the public interest. Their goals include relieving poverty and advancing education.
Nonprofit vs. Foundation
The main difference between a nonprofit and a private foundation is where funding comes from. Foundation funding typically comes from a family or company, while nonprofit funding comes more from donations or earned revenue.
What Makes an Organization Nonprofit?
A non-profit organization is a group organized for purposes other than generating profit and in which no part of the organization’s income is distributed to its members, directors, or officers. Non-profit entities are organized under state law.