The Benefits Of Owning A Non Profit
Starting a nonprofit organization is a big undertaking that requires extensive planning, financing and the support of a dedicated team. Nonprofits range from organizations that provide health, arts, environmental, advocacy, civic, cultural or human services. Although each nonprofit is different, the benefits for starting one are consistent.
Access to Grants
Similar to starting a for-profit business, starting a nonprofit requires funds to pay for leasing or purchasing office space, buying equipment, hiring a staff and for programming. Nonprofits have a wide variety of financial resources available to them, beyond loans. They have access to various grant programs designed to help them fund their organizations. In many instances, the grants available to nonprofit businesses differ from what’s available to for-profit businesses.
Even though nonprofits don’t seek profit, they are still set up as legal entities. Unlike a sole proprietorship, nonprofit organizations function as limited liability organizations. This is advantageous for owners because it keeps their personal assets separate than what happens with the nonprofit organization. For example, if an individual sues the nonprofit, limited liability prevents a suit from also being filed against the owner.
Non profits that file for 501 (c) (3) status are eligible for tax exempt status. Qualifying organizations, such as schools and churches, are exempt from paying local, state and federal taxes. Their exempt status helps keep more money in the organization for events, activities, equipment and supplies.
Companies and individuals who donate to nonprofit organizations who have 501 (c) (3) status can write their contributions off during the tax season. Nonprofits can highlight this benefit in their fundraising materials to help persuade people to donate to the cause the organization supports.
Non Profit Financing Options