Nonprofits explicit goal to to further an ideal or objective or objectives marked within a range set out by the Nonprofit. Nonprofits may not collect any of the money they do for private gain or transfer the money to any other private institutions, people, or assets. All money made from the Nonprofit may only go to contributing to the explicit goals and objectives set out by the Nonprofit.
Similar to Nonprofits, they may not collect any of the money they do for private gain or transfer the money to any other private institutions, people, or assets. However, where they differentiate is what kind of goals and objectives they have. They don’t necessarily have to apply for the “common good” of the people, they can be created to simply generate profits, but those profits must be contained within the organization.
Because of the apparent “good” natured goals of Nonprofits and Not-for-profits, they enjoy many tax benefits from the government to help encourage these projects for the “greater good” of society or to simply discourage private profits made from these organizations.
Major Differences
- Tax-Exception: Nonprofits have [501(c)] status by the IRS, while not-for-profit organizations may be governed by any other section within the 501(c) section of tax codes, such as [501(c)]for recreational organizations. Both types of organizations are considered tax-exempt, but only nonprofits donors’ donations, because of the [501(c)] status, are deductible on their personal or corporate tax returns.
- Financial reporting: Nonprofits must disclose all of their financial activities and governance, revenue, expenses and assets. This ensures that donors, beneficiaries and the community at large can get an overview of how effectively they are advancing their mission. Not-for-profits are not required to make this disclosure.
- Goals and Objectives: Nonprofits often focus on social causes, but cannot advocate or influence political matters, due to their [501(c)] status. Not-for-profit organizations support business or professional associations (chambers of commerce, for example, are [501(c)] organizations) or social clubs, and exist purely for the benefit of their members. They don’t have to operate for the public good and every penny they raise goes right back into their organization.DeVry (CRS CPA)