Understanding nonprofits
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Understanding nonprofits
First, let’s take a look at why donating is important. Donating helps support
vital organizations in our communities. These are called nonprofits.
Nonprofits are formed to achieve certain purposes. They contribute to and help
support the common good. Nonprofits can serve whole communities. They also can
serve specific groups. Usually nonprofits work toward a cause. They are established
to help people, and communities, better themselves.
Nonprofits differ from businesses in one key way. Businesses are formed to earn
money, known as profit. After a business pays its bills, it keeps any leftover
income. This extra income, or profit, is usually given to the company’s
owners or investors. The profit represents a reward for succeeding in business.
Unlike businesses, nonprofits do not give out profits. If they earn extra income,
they use these funds to run their organization. Nonprofits also usually do not
pay taxes. Most have what is known as tax-exempt status. Instead of paying taxes,
they can devote their resources to helping the community.
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