Briefs for Nonprofits: The Business of Nonprofits | Business

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The public may believe that nonprofits are all charities. This assumption is understandable; the preponderance of nonprofits in Citrus County are “charitable” nonprofits. They fall under IRS law code 501 (c) (3).

However, there are many unmet needs that there are many unmet needs that nonprofits can meet and not those that are charities. The IRS lists 27 different categories of nonprofit organizations. Each category was created to meet a specific need of an individual or a group.

Non-profit organizations

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All charities are guided by the IRS under tax code 501 (c) (3) rulings. Within this particular class, the IRS lists charitable, scientific, educational, research, safety, and certain sports organizations. Each of the categories has a specific mission and purpose. Within this category of nonprofit organizations, the IRS also lists three types of foundations.

Foundations are known for their financial benevolence, huge cash reserves and investments. They give grants and provide financial assistance for good causes.

The IRS closely monitors foundations to ensure operations meet specific operating standards. Foundations benefit from a modified tax exemption, but pay taxes on certain investment income.

Other non-profit organizations

Under the 501 (c) tax code, the IRS lists the most popular and easily recognized nonprofits, such as: civic leagues as 501 (c) (4), labor organizations and agriculture as 501 (c) (5) and chambers of commerce as 501 (c) (6).

The whole series of special nonprofits ends at 501 (c) (27), which is a state-sponsored workers’ compensation board. All non-profit organizations benefit from it when they operate within the framework of their statutory code specific to their mission and objective.

For-profit companies

For-profit companies offer products / services to a specific market. Their mission is primarily to generate profits and strive to deliver the best of what they make or serve.

Management skills applied in for-profit business ventures are transferable to how volunteers are expected to manage and serve the mission of a non-profit organization.

The mission of a non-profit organization is a market. It can be served and an underserved need can be met. Volunteers who come from a for-profit company to serve a non-profit organization can apply many of the skills required in the business environment.

Operational and managerial skills

Successful nonprofits need volunteers with financial skills. Good meeting management allows a board or committees to function effectively. Office management experience can be used to organize and keep the central location available to the public.

Volunteers with speaking or writing skills add value in getting the word out about the mission and purpose. Accountants can be used to keep the accounting books presentable. Almost any skill in the for-profit business world can be applied to the volunteer management of a non-profit organization.

Volunteering is a great job to have after retirement. The skills learned can be put to good use in helping a nonprofit organization achieve its goal of serving a mission. Join a group today!

Dr. Frederick J. Herzog is the founder of the NonProfit Resource Center and can be contacted by email: [email protected], or by calling 847-899-9000. Visit online at thenonprofitresourcecenter.com.


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