User:Taylordillard/sandbox

Nonprofit vs. not-for-profit

Nonprofit and not-for-profit are terms that are used similarly, but do not mean the same thing. Nonprofits are establishments that aren't interested in making a profit but interested in giving back to the community. While as a Not-for-profit is an organization that doesn't earn profits for its owners but it earns a profit for its pursed objective and so that it is able to continue to run. Both are organizations that do not make a profit, but may receive an income to sustain their missions. The income that nonprofit and not-for-profit organizations generate is used differently. Nonprofit organizations return their income back to the organization if they generate extra income. Not-for-profits use their excess money to pay their members who do work for them. Another difference between nonprofit organizations and not-for-profit organizations is their membership. Nonprofits have volunteers or employees who do not receive any money from the organizations fundraising efforts. They may earn a salary for their work that is independent from the money the organization has fundraised. Not-for-profit members have the opportunity to benefit from the organizations fundraising efforts. Both nonprofits and not-for-profits are tax exempt under the IRS publication 557. Although they are both tax exempt, each organization faces different tax code requirements. A nonprofit is tax exempt under 501(c)(3) requirements if it is either a religious, charitable, or educational based organization. Not-for-profits are tax exempt under 501(c)(7) requirements if they are an organization for pleasure, recreation or another nonprofit purpose.[5]

Nonprofits are either member-serving or community-serving. Member-serving nonprofit organizations create a benefit for the members of their organization and can include but are not limited to credit unions, sports clubs, and advocacy groups. Community-serving nonprofit organizations focus on providing services to the community either globally or locally. Community-serving nonprofits include organizations that deliver aid and development programs, medical research, education, and health services. It is possible for a nonprofit to be both member-serving and community-serving.