nonprofit


Also found in: Dictionary, Thesaurus, Financial, Wikipedia.
Related to nonprofit: Nonprofit organizations

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 ?
The a-la-carte services allow organizations to search for candidates using tools ranging from a nonprofit job board with real-time job matching to executive search, candidate certification, temp-to-direct hire, career coaching, and even payroll and outplacement services.
Given the missions of their organizations and the resource constraints nonprofits often face, CFOs told Bridgestar that one of the top challenges they face is dealing with nonprofit economics.
We wouldn't be opening without the help of organizations like the Nonprofit Finance Fund, which stepped up to the plate when typical sources were not prepared to help us move beyond the ruins of the World Trade Center.
Response: Producing the materials necessary to comply with a compliance review would place a tremendous, additional burden on the already resources-trained nonprofit community.
The critical question for the nonprofit sector is what great opportunities exist for leadership and influence as we shape the sector for the future.
Though the concept of the audit committee is not new to the nonprofit sector, its application has remained fragmented due to the size and diversity of the sector and a general lack of guiding principles for best practices.
As a result of his nonprofit board position, Kaiser was tapped for his first corporate board position at DowCorning.
The council, which will meet bimonthly, is intended to bring nonprofit, community service organizations together as a cohesive entity to determine the needs of the community, to solve problems and to effect change as needed.
But more than anything else, nonprofits must he relevant.
For the jet-setting CEO whose real job is generating quarterly corporate profits in tens of millions of dollars, the nonprofit world might seem a little like the Land of Make Believe.
Each year, The Nonprofit Center at La Salle University's School of Business, brings the Delaware Valley's nonprofit organizations together at its annual forum to discuss key issues impacting the nonprofit sector.
2014 revenues generated by the nonprofit sector totaled more than $1.

Full browser ?