Reasons For A Non Profit Organization

1855 WordsSep 10, 20148 Pages
What is the primary purpose of an organization? The primary purpose of any organization is to maximize revenue and minimize expenses. Profit is the single most important aspect on the mind of shareholders and/or owners. However, that is not the primary purpose of all organizations. A not for profit organization has a mission that seeks to benefit the greater good of the community, society or the world. Nonprofit Organizations can make a profit however, the financial benefits are not for the owners/shareholders of the company. Profit in nonprofit organizations should only be used to achieve the mission of that organization whether it is to feed the children, provide funds for Cancer research, or Stop Global Warming etc. Starting a non-profit is nearly parallel to a profit organization. You need a proper financial system, payroll, bank account, staff, insurance, mission statement, planning and re-evaluation. These are just a few basics of any organization. However, some differences due arise since Nonprofit do have differences to profit organization. For example, Filing the necessary documents such as the 501C is a tax exempt under the Internal revenue code for charitable organization. In this research paper, I am going to discuss the overview of taxation of exempt organization. The major difference between the private foundation and exempt entity is that an exempt entity is not required to pay any taxes on the incomes earned by it whereas private organization are required

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