What does nonprofit mean?
Today’s society rely heavily upon “Google” to research and gather information. It’s an amazing thing to have the answers at the tip of your fingers. However, there is a lot of wrong or incomplete information on the internet. We “Googled” this question “What does nonprofit mean?” and this was the first answer provided in the search query
Nonprofit Definition – “not making or conducted primarily to make a profit”
The purpose of a definition is for clarity. Define means to make clear the understanding or meaning of a word. This answer is not wrong, but it is incomplete and uses words to define “nonprofit” that would give people the wrong understanding. Specifically the words, “not making” and “profit”. Most people who are not knowledge of business terms, and would assume this means “not making a profit” when in fact the word “primarily” is included in this sentence as well as “conducting”. “Primarily Conducting” are the most important words in this definition but they are the least important to someone who don’t understand their meaning as it relates business structure. Let’s break this down to lay-mens terms, shall we.
Nonprofit, Not-for-profit, Charity as it relates to business structure would better be defined as such, “A company or group which uses the majority of it’s income, assets, or revenue for the benefit of the community in which it serves.”
Comparison scenario: A for profit company, corporation, organization, is legally allowed to sell shares of their company. A for profit company can legally use any income acquire for their personal benefit. These are actions that are strictly forbidden by nonprofit executives and carry a legal penalty for violations of Federal Laws of Compliance governing nonprofit organizations. There are different types of nonprofits that are allowed to operate in different capacities but this is a basic rule of thumb for Federally Approved 501c3 Tax Exempt Public Charities. Key word being “Public Charities”.
Public Charities are businesses and all businesses have to bring in revenue and staff employees. How they acquire revenue and in what portions is different but they all do.
Watch the video below for a brief but in-depth explanation of what it means to be a nonprofit/ not-for-profit, charitable corporation, foundation, group, or agency. The information provided in the video, includes excerpts by a Federally Certified Agent at the Internal Revenue Service (I.R.S.) which determines nonprofit status and governs their business activities.
Many Artists/Musicians quickly scroll past links to our company when they see the words NONPROFIT or CHARITY. The reason they do this is because they assume “This Company wants me to give them my music for free or work for free. They seldom stop to think, “Can this company help me?” People who are not artists think to themselves “I can’t sing so they definitely can’t help me.” This is an assumption that could cost you. lol
Donor Bill of Rights
- To be informed of the organization’s mission of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.
- To be informed of the identity of those serving on the organization’s governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities.
- To have access to the organization’s most recent financial statements.
- To be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors.
- To be assured that information about their donations is handled with respect and with confidentiality to the extent provided by law.
- To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
- To be assured their gifts will be used for the purposes for which they were given.
- To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.
- To receive appropriate acknowledgement and recognition.
- To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.