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Related to Nonprofit: Nonprofit organizations

Nonprofit Organization

An organization that operates as if it were a business but does not seek a profit. Common examples of nonprofits include charities, private schools, and think tanks. Nonprofits do not pay taxes; donations to many are tax-deductible, at least up to certain limits. In order to qualify for this status, however, a nonprofit must register with the IRS, under section 501(c) of the tax code. See also: 403(b).
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


Charitable, cultural, and educational organizations that exist for reasons other than providing a profit for their owners, directors, or members are nonprofit organizations.

However, these organizations can generate income to pay for their activities, salaries, and overhead by charging for services, making investments, and soliciting donations and memberships.

A nonprofit arts center, for instance, may charge patrons for tickets and event subscriptions.

Nonprofits incorporate in the states where they operate and are exempt from the state income taxes that for-profit corporations must pay. Some but not all qualify for federal tax-exempt status under section 501(c)(3) of the Internal Revenue Code.

Contributions to those qualifying organizations are tax deductible, though tax rules govern the percentage of your income you may deduct for gifts to different types of nonprofits.

In exchange for these tax benefits, nonprofits must comply with some of the same financial reporting rules that for-profit corporations follow.

For instance, nonprofits generally must follow corporate governance rules and make their financial reports available to the public.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
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Under the motion, County Chief Executive Sachi Hamai will provide an implementation strategy to the board within 120 days, consult with leaders from county nonprofits In developing the new guidelines, and send a letter signed by all five supervisors urging state leadership on the federal rules.
The Nonprofit Center is presenting summer classes for the first time, offering four of its fundamental classes in July 2105.
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Unlike for-profit businesses, "many nonprofits do not generate operating surpluses, even after accounting for revenue sources such as tuition or membership fees," said Magda Heyden, senior vice president of global commercial banking for Bank of America Merrill Lynch, whose nonprofit clients include hospitals and health systems, colleges and research institutions, and major membership organizations, among other categories.
"Evaluating operations is simpler." For instance, "data provided by the organization, interviews, and other information sources to confirm that the nonprofit is actually delivering the activities and outputs it claims.

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