nonprofit

(redirected from Non-profit organization)
Also found in: Dictionary, Thesaurus, Financial, Acronyms, Wikipedia.

Nonprofit

A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive.

Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. Like for-profit corporations, nonprofit corporations must file a statement of corporate purpose with the Secretary of State and pay a fee, create articles of incorporation, conduct regular meetings, and fulfill other obligations to achieve and maintain corporate status.

Nonprofit corporations differ from profit-driven corporations in several respects. The most basic difference is that nonprofit corporations cannot operate for profit. That is, they cannot distribute corporate income to shareholders. The funds acquired by nonprofit corporations must stay within the corporate accounts to pay for reasonable salaries, expenses, and the activities of the corporation. If the income of a corporation inures to the personal benefit of any individual, the corporation is considered to be profit driven. Salaries are not considered personal benefits because they are necessary for the operation of the corporation. An excessive salary, however, may cause a corporation to lose its nonprofit status.

Nonprofit corporations are exempt from the income taxes that affect other corporations but only if they conduct business exclusively for the benefit of the general public. State laws on corporations vary from state to state, but generally states give tax breaks and exemptions to nonprofit corporations that are organized and operated exclusively for either a religious, charitable, scientific, public safety, literary, or educational purpose, or for the purpose of fostering international sports or preventing cruelty to children or animals. Nonprofit organizations may charge money for their services, and contributions to tax-exempt nonprofit organizations are tax deductible. The Internal Revenue Service must approve the tax-exempt status of all nonprofit organizations except churches.

A vast number of organizations qualify for nonprofit status under the various definitions. Nonprofit organizations include churches, soup kitchens, charities, political associations, business leagues, fraternities, sororities, sports leagues, Colleges and Universities, hospitals, museums, television stations, symphonies, and public interest law firms.

A nonprofit corporation with a public purpose is just one organization that qualifies for tax-exempt status. Under Section 501 of the Internal Revenue Code (26 U.S.C.A. § 501), more than two dozen different categories of income-producing but not-for-profit organizations are exempt from federal income taxes. These other tax-exempt organizations include credit unions, civic leagues, recreational clubs, fraternal orders and societies, labor, agricultural, and horticultural organizations, small insurance companies, and organizations of past or present members of the armed forces of the United States.

The number of nonprofit corporations in the United States continued to increase into the twenty-first century. Although nonprofit corporations cannot produce dividends for investors, they provide income for the employees, and they foster work that benefits the public.

The activities of nonprofit corporations are regulated more strictly than the activities of other corporations. Nonprofit corporations cannot contribute to political campaigns, and they cannot engage in a substantial amount of legislative Lobbying.

Further readings

Barrett, David W. 1996. "A Call for More Lenient Director Liability Standards for Small, Charitable Nonprofit Corporations." Indiana Law Journal 71 (fall).

Hammack, David C., ed. 1998. Making the Nonprofit Sector in the United States. Bloomington: Indiana Univ. Press.

Ott, J. Steven, ed. 2001. Understanding Nonprofit Organizations: Governance, Leadership, and Management. Boulder, Colo.: Westview Press.

nonprofit

adjective altruistic, beneficent, charitable, eleemosynary, humanitarian, munificent, philanthropic, public service
Associated concepts: nonprofit corporation
References in periodicals archive ?
To the non-profit organization employing the Charitable Emporium as a fund raising tool can be very cost effective.
We noticed the impact that this economy is having on non-profit organizations and so we created Conduit Gives to give back.
3 million, 50-unit project in Peterborough sponsored by the municipal non-profit organization of the City of Peterborough.
Other Georgia non-profit organizations benefiting from AHIC grants range from Boys & Girls Clubs and YMCAs to local domestic violence shelters, performing arts organizations and school foundations.
These disasters have come so close to each other that non-profit organizations are literally drained of funds desperately needed for medical treatment, food, water, clothing, shelter and therapy.
His reputation in the business community and his experience working with other non-profit organizations will serve our efforts well.
The awards program is designed to stimulate industry partnerships with effective neighborhood non-profit organizations and encourage activities that increase the flow of capital and delivery of financial industry services to these communities.
amp; SAN DIEGO -- The Epilepsy Research Foundation, a collaboration of several non-profit organizations, including the Epilepsy Foundation, the Epilepsy Therapy Development Project and Finding a Cure for Epilepsy and Seizures (FACES), together with the Milken Family Foundation, a private philanthropic foundation, today announced recipients of translational research funds totaling over $400,000 to advance three promising new epilepsy therapies.
Charley's Fund is a non-profit organization founded by Tracy and Benjamin Seckler.
Funds raised through the campaign will be distributed by Energy Outreach Colorado, a non-profit organization that raises funds for energy assistance in the state.
The KN Karen Neuburger([R]) lifestyle brand has introduced a line of holiday-themed pajamas - including a matching "Mommy & Me" set - that benefit First Book, an international non-profit organization that provides new books to children from families in need across the country.
org) is a 501(c)(3) non-profit organization founded in 1999 to help ensure that children and adults with disabilities have accessible technology to actively in the information marketplace.