Not-for-profit Organizations

Social entrepreneurs start non-for-profit organizations. Social entrepreneurship involves changing the world in a good cause. If you have in mind to help people who can't pay you, then you might consider starting a non-for-profit company. At S.C.O.R.E. and the Baiada Center we get lots of people coming through with ideas for businesses which are really better suited for a not-for-profit organization than a for-profit business.

A not-for-profit company is designed not to make a profit. This is a good idea if you're going to provide something to people who need it but can't pay for it. I use "not-for-profit" rather than the "nonprofit" to distinguish an organization designed not to make a profit [Not-for-profit] from an organization that is designed to make a profit [For-profit] but isn't making any. This is a whole 'nother thing.

Because they don't make a profit doesn't mean they aren't good organizations. They do great things have budgets in the billions of dollars and pay good salaries. The International Red Cross is a non-for-profit organization. Not-for-profit organizations can have some for-profit ventures, too, but are strictly limited.

About.com says:

Nonprofits are corporations formed for a charitable, civic, or artistic purpose. Nonprofits are generally exempt from federal and state taxation on their income, and so they are often called "exempt organizations." Nonprofits have substantial responsibilities for reporting their activities, income, and assets to ensure that they are in compliance with federal and state laws governing charities. For additional information on starting, managing, and developing a not-for-profit organization, see the About.com Guide to Nonprofits.

You should google "Types of Business Organizations." There's a ton of stuff on entrepreneurship in general. Follow the links and you'll never want for reading matter.

The thing is, if you have a not-for-profit organization, you are eligible for pools of money that aren't available to for-profits. So you can get money from one source and operate when the users of your service can't pay for it. That's the advantage of a Not-for-Profit. And you get the feeling of doing good in the world.

All business is tough right now. Not-for-profit businesses are dropping like flies. Investors' funds are severely stressed and giving is down. Obama's policies cut back on tax incentives of charitable giving. Individual contributions are down because normal individuals have seen their savings either entirely or largely disappear. But don't let that stop you. Link your passion to human need, whether it's getting soccer shoes to innercity kids or improving third-world countries' access to clean water, or whatever.

Always consider carefully what you do in business. And involve both an attorney and an accountant in your decision. They can evaluate your specific situation.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

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