Non-profit corporations have a similar structure to other types
of corporations. Both entities will have leadership, as well as employees that
answer to those in management. Corporations will likely have profit, while non-profit
corporations have income which is then funneled back into the operations of
that organization. Those monies are then used to meet the goals of the non-profit
corporation, as well as paying the salaries of those employed there.
Non-profit corporations will likely take income and distribute
it as a percentage into several different pools. The first pool will be the
fees required to fund the operations of the organization, such as
administrative fees and costs. The next pool will include the materials and
work necessary to meet the goals of the organization. For example, this pool
would include monies for supplies in the field in organizations that assist individuals
after a natural disaster. The last pool would be monies used to pay the
salaries of the management and employees of that organization.
The monies brought in by a corporation, on the other hand, are
used in a different way. The salaries of those that work there must be paid
with the profit of a company, and those salaries would not likely be
capped as they generally are in a for profit corporation. In addition, the
profits of the company must pay for administrative costs and supplies, as well
as pay for the building where the company exists.
Each jurisdiction may have differing rules for starting a non-profit.
However, in most cases, the individual that is working towards starting a non-profit
may need to follow a specific list of steps while adhering to the laws in that
When one wonders how to start a non-profit organization, they
must first conduct research about all applicable local and Federal
laws. They need to first select a name for their organization and then
check that the name is not in use. The individual must then have a very specific
list of the goals for the non-profit organization, including those which apply
on the local or global level.
After those steps have been completed, the individuals must apply
to register the non-profit organization. The registration of the organization
may include a fee to register the name and the organization. In addition, the
non-profit must apply for a license to operate in the justification where the
organization will be located.
When one is interested in how to start a non-profit
organization, they must conduct careful research. In addition to the basic
steps required to start any company or business, there are specific rules which
must be followed for non-profit organizations. If those rules are not
followed exactly, the non-profit organization may not achieve tax-exempt
Non-profits rely on a variety of sources of income in order to
keep operations running, as well as payment to employees and other
expenses. That funding may come from grants or donations and fund-raising is
usually vital to the success of a non-profit organization.
Fund-raising ideas for non-profit organizations may depend on
several factors. First, the type of organization may dictate the types of
fund-raising efforts which would be appropriate. For example, food pantries may
ask for donations, as well as hold food drives at which the local community can
bring specific types of goods.
However, fund-raising ideas for non-profits may include more
creative ideas, such as joining community efforts with the efforts of the non-profit
organization. For instance, the food pantry may ask local potters to make bowls
in their pottery shop. Those empty bowls may then be sold to the local
community as a representation of those that go hungry.
Fund-raising ideas for non-profit organizations may also be
dictated by local laws and regulations. For example, certain types of
fund-raising efforts may not be legal in certain jurisdictions. For instance,
some communities may prohibit door to door sales of candy, wrapping paper and
other items sold for fund-raising. However, the same community may allow those
efforts at storefronts, where volunteers can sell those items in front of the
local grocery store.
An LLC, or a limited liability company, allows the entity of a
corporation to be formed while allowing that entity to have limited financial
and legal liability for the actions of that corporation.
AN LLC can include any number of shareholders or partners which
includes taxation as a corporation, but they are not technically a corporation.
Many times, a limited liability corporation is a sole proprietor company with a
A single owner may form an LLC in order to protect their finances
and personal interests from the corporation. For example, if someone were to
sue the LLC and win, the individual owners’ finances could not be included in
any awards. In most cases, a judgment against an LLC could not include
collection for that judgment from the personal or individual property of any of
the individuals that make up the LLC.
Although a limited liability corporation helps to protect those who
make up the corporation, there are issues where legal and financial liability
is not limited to the corporate entity. For example, if individuals in that
corporation commit fraud or misrepresent the corporation, individuals and the
company could be liable.
For smaller companies, an LLC is a great way to form a corporation
while allowing those within the corporation to have limited financial and legal
liability. In addition, the formation of an LLC protects the company itself
from being legally and financial liable in most cases. For instance, the owner
of an LLC that goes bankrupt would not be liable to the creditors of that
corporation in most cases.