What is a non-profit?
A business that is formed with the intention of not making a profit is known as a non-profit. Non-profits are usually established to, for the most part, for the benefit of the public. Non-profits constitute companies with edifying, literary, scientific, and charitable purposes. Every sort of business structure comes with its own advantage. A non-profit business structure includes advantages such as:
Exemption from tax
Having a tax-exempt status is among the biggest advantages of running a non-profit business can have. Statutory corporation entities, or non-profit organizations, to be precise, have the special leeway for applying to both state and federal tax-exempt status. Additionally, after being exempt from tax, all the donations made to them are deductible for tax purposes, and this further encourages people to keep donating to your cause. Although this varies from state to state, non-profit corporations are normally excused from paying sales taxes or property taxes, or both.
Being Eligible For Grants
Certain non-profits such as 501(c)(3) corporations, gain eligibility to obtain grants, public as well as private. This way they are able to get working capital and the donations made to them are deductible for tax purposes.
Type A Employees
Individuals working at non-profit corporations are known to be very motivated and driven regarding their work. They thrive on the accomplishments of their clients and are able to maintain an excellent work-life harmony. Running a non-profit corporation, you can expect to bring in employees that are passionate about your cause.
Volunteering Board Members
Non-profit board members are generally volunteers. This makes it feasible to call forth a variety of individuals with different abilities and skills to your non-profit and diversify your network. Additionally, this saves a great deal of money.
Non-profit corporations can exist for exceptionally long – even outlive their founders – as long as the non-profit is able to generate income and maintain their sole purpose. There have been many examples of non-profits, one example being as old as over a thousand years old.
Legal Protection Against Liability
Non-profit founders, executives, and employees all get limited liability protection. This means that they are not liable for any debts accumulated in the non-profit. Their assets are also under protection if they run into financial issues, court trials, or receive injuries. If someone wants to take legal action against your business, they will only be able to pursue the corporate entity and not the personal assets you own.
A non-profit corporation will have its own separate identity. That identity may have its own agreements, its own disputes, and is accountable for its own contractual commitments.
A non-profit organization will hold more credibility compared to one or more than one individual aiming to launch its non-profit purpose. People will choose to donate to a non-profit organization over a group of people with a cause.
U.S. Mail Service Deductions
Non-profit corporations that have a tax-exempt status have the added benefit of receiving reductions on mail rates in bulk.
Trained Registered Agent
It is required for non-profit organizations to designate a registered agent for themselves. This makes it possible for them to hire a professionally trained registered agent which helps them have their time-sensitive legal documents handled properly and efficiently if the non-profit gets sued.
A non-profit organization has an adequate number of employees who may be eligible for discounts to health insurance benefit plans.
Having a non-profit can make it viable for you to establish formalized job roles with full descriptions and obligations. This can draw in more professional and highly skilled individuals to work for your non-profit.
Organizing a non-profit organization based on a cause you are passionate about, is an ideal way to attract and grow a team of equally passionate individuals to support your cause and work towards gaining success for your cause. You can read more about LLCs here.