Non Profit Organizations
Nonprofit organizations offer services or fill needs in society in ways that a for-profit organizations cannot. Nonprofit organizations include shelters for battered women, food pantries, offer medical care, provide housing for people who are homeless and more. Non profit organizations frequently have limited staffing. As such, they rely heavily on committed volunteers to carry the load. Staff members and volunteers often report having a deep sense of satisfaction that can only come from helping others.
The different names that are given to nonprofit organizations often vary according to where they are located or the type of services that they provide. They may be referred to as agencies, charities, non-government organizations, missions or charitable causes. Forming nonprofit organizations isn't impossible. There are special rules and reporting guidelines that must be closely followed. An application for tax-exempt status must be filed with the IRS. When charities qualify, the IRS will grant the coveted 501c3 status.
The 501c3 status allows donors to deduct contributions from their taxes. This encourages the public to provide the support the charity through in-kind gifts of supplies and cash donations and by volunteering. Nonprofit organizations who don't obtain the 501c3 status are at a significant disadvantage and should do everything possible to qualify. It is important that nonprofit organizations be structured properly before applying to the IRS. The rules and paperwork will vary by state but will usually be overseen by an office of comptroller or by a department of charitable solicitations. Nonprofit organizations may benefit from consulting with an attorney and may find that assistance from an accountant may be helpful.
Non profit organizations are structured differently that most small businesses. A board of directors will oversee an executive director who will then oversee other staff or volunteers. The required offices that are filled by members of the board of directors include a president, secretary and treasurer. The board is responsible for all business decisions that affect nonprofit organizations. The executive director manages all daily operations. It is critical that founders of nonprofit organizations understand that executive directors are hired or fired at the pleasure of the board of directors. To think otherwise can cause confusion or hurt feelings.