NON PROFIT ORGANIZATION
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What is a non-profit organization
A non-profit organization (NPO) could be
- non-business entity
- not-for-profit organization
- non-profit institution
It is a legal entity worked for a collective, public or social benefit, aiming to generate a profit for its owners. The non-profit organization is subject to the non-distribution constraint but may seek approval from governments to be tax-exempt.
What are the 4 types of non-profit organizations?
- Public charities
- Foundations
- Social advocacy groups
- Trade organizations
- Non-profit organization examples
- Habitat for Humanity
- Feeding America
- Greenpeace Australia
- One Drop
- Rotary
- Oxfam Australia
- Children International
- Ford Foundation
- Charity: water
- Red Cross Australia
Nonprofit organizations advantages and disadvantages
Advantage:
Employee Commitment
Some non-profit organization employees have a personal interest in commitment to the organization’s cause.
Financial Benefits
When an organization is identified at the federal level by the IRS, it can take advantage of tax and financial benefits:
- It encourages donors , when donations to an organization are tax-deductible.
- Non-profit organizations may be given supportive terms and discounts by landlords, service providers, and retail companies.
- IRS-recognized non-profit public charities do not have to pay corporate income tax.
Intrinsic Rewards
Non-profit organizations’ employees, receive Intrinsic rewards from the satisfaction of serving clients and community members, who are not in a position to fend for themselves. These services help communities of the population that are often neglected or undeserved, such as homeless old people.
Protection from Personal Liability
Incorporation as a non-profit can protect an organization's founder, officer, and worker from personal debt for the organization's debts, including fines and lawsuits.
Disadvantage:
Public Scrutiny
The organization must make its financial statements available to the general public, Many non-profits opt to periodically hire a third-party organization to audit the non-profit 's books and operations to make sure consent with tax codes and industry best practices.
Limited Funding
Fundraising can be the greatest challenge for non-profit organizations, especially during an economic downturn and when unemployment rates are high.
Non-profit or Not-for-profit
A non-profit organization's purpose are to further a social cause and provide a public benefit, where a not-for-profit can simply serve the goals of its members. It qualifies for tax-exempt status by the IRS.
Non-profit organizations include universities, hospitals, national charities and foundations or not-for-profit includes sports club.
Conclusion
A non-profit organization (NPO) is an organization that used its income only to run its own organization which is dedicated to a cause.
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