Non-profit and charitable organizations play an essential role in the economic and collective well-being of our local communities, our nation and the world. Nonprofits are designed to meet a societal need the government is not meeting or is not meeting well. They provide a structure for people to contribute their time, resources and expertise for a greater good. In short, non-profit corporations are for people, to help them achieve some common purpose.
The term non-profit does not mean the company isn't financially feasible. Non-profit organizations are a specifically defined type of corporation registered with the Internal Revenue Service (IRS). Unlike individuals and business for-profit, when an organization is registered as a non-profit, the entity doesn't pay taxes on its income. Non-profit’s can accept donations from individuals and corporations who can then deduct their contributions from their taxable income. Other benefits for non-profits include lower property taxes and reduced postage expenses on certain size mailings.
The most common form of non-profit is the 501(c)(3), a tax-exempt organization recognized by the IRS. The 501(c)(3) applies to "charitable" organizations. These are the nonprofits we most commonly contribute to, volunteer for, and hear about such as the Red Cross, American Cancer Society, and United Way. The IRS states for an organization applying for recognition of exemption as a charitable organization, it must show that it is organized and operated for purposes that are beneficial to the public interest (IRS.gov, Pub. 557). Some examples of this type of organization are those developed for the following services or programs:
• “Relief of the poor, the distressed, or the underprivileged”
• “Advancement of religion”
• “Advancement of education or science”
• “Erection or maintenance of public buildings, monuments, or works”
• “Lessening the burdens of government”
• “Lessening of neighborhood tensions”
• “Elimination of prejudice and discrimination”
• “Defense of human and civil rights secured by law, and”
• “Combating community deterioration and juvenile delinquency” (IRS.Gov, Pub 557).
Between 1999 and 2009, the National Center for Charitable Statistics (NCSS) reported a 31.5 percent increase in the number of non-profit organizations totaling to 1,581,111 in the United States. Thousands more are developed each year. These non-profit organizations are crucial to the economy and the quality of life in our communities.
Click here for a link to the 1999 - 2009 report displaying the number of nonprofit organizations registered through 2009.
Non-profit organizations provide a wide array of programs and services that government agencies and “for-profit” enterprises cannot address. In order to provide these programs and services revenue or income is needed for them to exist. According to William F. High (2010) “your funding plan must be diverse and broad-reaching” (High, 2010, page 18). A diversified approach may include revenue from many sources such as:
• “Earned-Income / Revenue Sources,
• Online and Noncash Giving, and
• Major Donor Services – Asset Giving” (High, Page 19).
Grants for Christian Ministries and More by William F. High can be ordered by clicking here.
--Jackie Jones is the Marketing and Communications Director of Christian Foundation Grants. She may be reached at jjones@christianfoundationgrants.com.