Smart Choices: The Guide to Finances and Philanthropy

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Managing your money

Supporting your community

Running a nonprofit

Family giving

Instructions:
For Students
For Teachers
For Parents

Instructions for students:
Running a nonprofit

This section of the Web site discusses nonprofits and nonprofit management. Read each section in order.

First you’ll learn the basics of how nonprofits operate. Next, you’ll have the chance to practice running one. In the section on planning a budget, take these steps:

Choose the nonprofit you’d like to work with. There are four sample nonprofits in this section. These nonprofits don’t really exist. However, they’re based on real organizations. Choose the nonprofit that seems most interesting to you. Which one would you prefer to run?

Review your nonprofit’s description. You may wish to print this description for reference. In this step, you’ll learn the details of your organization. Pay close attention to the budget explanation. You’ll need these figures to complete the budget worksheets.

Complete the budget worksheets. First, complete the revenue worksheet for your organization. You may have to use your math skills in this section. Some figures will need to be calculated. Include revenue that your nonprofit receives from all sources. Then complete the expenses worksheet. Include expenses based on your nonprofit’s description.

Budget worksheets

Compare revenue and expenses. Now it’s time to see if your budget balances. Look at your revenue totals. Compare these to your total expenses. These totals should be the same. If they aren’t, go back and recalculate your worksheets. If you’re having trouble, ask your teacher or parent for assistance.

Nonprofits

A nonprofit is an organization whose purpose is to serve society. Unlike other businesses, nonprofits do not exist to make profits. They may make profits, but the profits aren’t given to the people who run the organization. Instead, the profits are used to help the organization continue to operate.

Nonprofits typically have the following components:

	501(c)(3) status—Section 501(c)(3) of the Internal Revenue Code allows qualifying nonprofits to be excused, or exempted, from paying taxes. Nonprofits who are exempted from paying taxes are said to have “501(c)(3) status.”
	Board of Directors—Each nonprofit has a Board of Directors that oversees the organization. The members of the Board of Directors are usually volunteers. They work together to govern the nonprofit and establish its policies.
	Employees—Nonprofits usually employ executive directors who may be assisted by other staff. Nonprofit employees are paid wages or salaries. Nonprofit salaries are often less than salaries in the business sector. For instance, the pay for a starting job at a nonprofit averages 22 percent less than similar jobs at for-profit companies

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