Difference Between NPO and NPC Formation
- An NPO requires a constitution.
- An NPC requires a Memorandum of Incorporation (MOI).
- An NPC can register as an NPO.
- Best practice is to incorporate an NPC and register it as an NPO to give credibility, resulting in more donations.
Governance and Accountability
- NPOs use profits to attain organizational purpose.
- NPCs have directors with fiduciary duty.
- NPC directors oversee finances responsibly, adding accountability.
Confusion Existence in Nonprofit Sector
- Confusion exists between NPOs, NPCs, NGOs, and PBOs in governance, funding models, transparency, and accountability.
- NGOs operate independently from government.
- NPCs incorporate for public benefit.
- NPOs use profits to attain organizational purpose.
- If income is over a threshold, NPCs require tax audits.
- NPO boards lack this financial oversight obligation.
- An NPC can register as an NPO.
- An NPO cannot register as an NPC.
Objectives and Operations
- The objectives of NPC are not linked to profit but sound financial management is important.
- Legally entities qualify for sponsors and donations.
- Financial statements must be prepared.
- Credibility and financial management attract sponsorship.
- The primary objective is to benefit the public.
- Income and property may not distribute to incorporators, members, directors except reasonable compensation.
NPC in Nonprofit Sector
What does NPC mean in nonprofit?
What type of business is an NPC?