The term “nonprofit” is usually associated with large, legal entities which can either be socially or politically inclined. A nonprofit is more organized and is often represented by any of its staff from its charter or governing body. In big countries, like Canada, a nonprofit can have the privilege of a tax-exempt status. On the other hand, a not for profit is usually associated with a smaller group which is generally focused on human interest areas like a hobby or any particular sport. Considering this, a not for profit can’t have the privilege of a tax-exempt status.
We often think how a nonprofit and not-for-profit organizations usually work. If they don’t gain any money from their free services, how do they benefit from it? Not all people are money-driven. Some are also service-driven. A nonprofit and a not-for-profit organization are also able to make money through sponsorships and donations from several groups. They only become a nonprofit and a not-for-profit since they don’t use the money for their personal gain. But to be able to keep the organization alive and kicking, they have to use the profits they earn so as to continue their mission of giving free service to the people. The nonprofit and not-for-profit establishments are composed of volunteers.
A nonprofit organization must meet the following conditions: It belongs to a charter; is built and organized with a mission of serving the community, or helping the community to make it a better place. And lastly, a nonprofit organization doesn’t deal with paying of dividends among stockholders. Meanwhile, a not-for-profit organization only fits within the following criteria: It is involved in smaller groups and revolves around a particular hobby or recreational activity; doesn’t have charters or a governing board; must not have the intentions of earning money.
For more information call Ashcroft & Associates at 250-334-3797.