Redirected from Nonprofit organization
Such "organizations" are often charities or service organizations and may be organized as a not-for-profit corporation or as a trust, a cooperative or they may be purely informal. Sometimes they are also called foundations, and endowments[?] that have large equity funds[?]. Most foundations give out grants to other not-for-profit organizations (or fellowships to individuals) but the name foundation may be used by any not-for-profit corporation even volunteer organizations or grass roots[?] groups. A non-profit organization may be a very loosely organized group such as a block association[?], or a trade union, or it may be a complex structure such as a university, hospital, documentary film production company or educational book publisher.
Most jurisdictions have laws governing the setting up, running, and reporting requirements of these organizations. In many aspects they are similar to business entity[?] though their are often significant differences. They both must have board members, steering committee members or trustees who owe the organization a fiduciary duty of loyalty and trust.
The organization's (a) charter[?] — if a not-for-profit corporation — or (b) trust instrument — if a trust — or (c) articles of association — if an association — must specify that no part of its assets shall benefit any of persons who are members, directors, officers or agents (its principals) for it to qualify for tax exempt status. As well the organization must have a legal, charitable purpose, i.e. the organization must be created to support educational, religious, or charitable activities. These elements do not mean that the organization cannot pay employees or contractors for work or services they render to the organization. This limitation means that as long as the organization operates within its exempt purposes and it maintains an endowment or uses any excess revenue to further develop its activities it will not be taxed by the Internal Revenue Service.
Such a surplus — that is, whatever part of its income is left after its operating expenses are paid — which might be considered similar to "profit" — must be spent on the charitable or public purpose(s) for which it was organized, not paid as a dividend or benefit to anyone associated with running or organizing it.
Not only must the organization meet the requirements the state where it is organized sets for non-profits, but it must also meet complex I.R.S. regulations. These regulations are used not only to determine if the organization is exempt from tax under the organization's activities as a non-profit organization. If the organization purpose is one of those described in §501 of the Internal Revenue Code, it may apply for a ruling that donations to it are tax deductible to the persons or business entities who make them. the organization itself will be exempt from taxation as long as it does not engage in unrelated business activities[?]. As well the IRS has enacted intermediate sanctions should the members of the organization engage in practices that may excessively benefit any of the organizations members (or officers, directors, etc.) rather than revoking the organization's exempt status (which was the only option available before the adoption of intermediate sanctions) the I.R.S. may now levy a penalty on the organization for engaging in a transaction that resulted in a private inurement or private benefit. See the entry on intermediate sanctions for more detailed information.
Examples of non-profit organizations include:
Many non-profit organizations use the .org top level domain when selecting a domain.
wikipedia.org dumped 2003-03-17 with terodump