What makes nonprofits so special? Nonprofits are not bound by the same rules and regulations that businesses are. Because they do not have to file the same financial information, they have the ability to be more creative when it comes to planning and investing.
Nonprofits are tax exempt. Therefore, unlike corporations, they don’t have to pay out taxes as well as operating to other people.
A nonprofit also has very little overhead and doesn’t have to worry about income taxes or salaries. They are also not subject to any of the requirements that businesses must meet.
The Nonprofit Association of America (PFA) says, “Non-profit organizations are the core of our democratic society.
They not only fund social services and organizations, but they serve and empower communities in which they are located.”
They can also put their money where their mouth is and apply for grants and loans from the government. Unlike with some corporations, it is much easier to apply for a grant and not have to worry about how it will affect your bottom line.
Nonprofits can also take part in some type of public service project. It can be as simple as fixing up a park or creating and open community building or they can help teach children how to read. Whatever it is, it has the benefit of not being tied to a certain amount of revenue.
When you see the amount of service that some nonprofits are willing to perform for their community, it becomes easy to see why they deserve their status. Their dedication and honesty to show what a true representative of the community they serve is.
Even though nonprofits have no profit, they do have a payroll, which usually covers much of the expenses.
They may also have a board and some executives who work directly for them, and they do get paid for these services.
Nonprofits are a great asset to any community because they have the potential to receive a lot of money from the state grants. Nonprofits get tax-deductible donations, free donations, and a variety of other gifts and grants that they can use for various programs.
- There are two types of grants that can be given to nonprofits. Tax-deductible donations are only one type of grant and grants are another type of grant.
- With a tax-deductible donation, the nonprofits will pay themselves back once they collect the funds from all of the donations. Once they do this, they have to distribute the funds in an even fashion across the board and at the end of the year, they are taxed on their profits.
- There are other types of grants as well that nonprofits are eligible for, such as housing and education grants, community grants, etc. It all depends on what type of grant they are seeking.