Presentation on theme: "Junior Intern Program September 14, 2013. What is a nonprofit? What do they do? Who owns nonprofits? How big is the sector? What are the advantages."— Presentation transcript:
What is a nonprofit? What do they do? Who owns nonprofits? How big is the sector? What are the advantages and disadvantages of being a nonprofit? How are they funded? How do you get information about them? What does a Board of Directors do?
Wikipedia says: an organization that uses surplus revenues to achieve its goals rather than using them as profit or dividends. A nonprofit corporation is formed to carry out a public purpose, whether that be religious, educational, charitable, scientific etc. It is prohibited from acting in a manner that results in private inurement (profit) to individuals.
501(c)(3) organizations, which are defined in U.S. tax law as "charitable, religious, educational, scientific, literary," and related organizations such as: private, not-for-profit hospitals, clinics, colleges, universities, elementary, schools, social service agencies, child care centers, orchestras, museums, theaters, environmental organizations, homeless shelters, soup kitchens, etc.
The nonprofit organization is not “owned” by the person who started it. It is a public organization that belongs to the public at- large, or the community. Those responsible to operate the organization on behalf of the community are the members of the board of directors.
235,113, plus another 130,000 volunteers Makes it Virginia’s 3 rd largest employment sector, behind retail and professional services 3x as many as the state’s finance and insurance industries!
1.6 million in the United States 12,679 in Virginia 68% of Virginia nonprofits have budgets less than $1,000,000. CMoR’s budget $3.4 million. But some are bigger
St. Mary's Hospital of Richmond Inc. Richmond Hospitals $608,747,034 University of Virginia Physicians Group Charlottesville Ambulatory health $309,500,733 Bon Secours Memorial Regional Medical Center Inc. Richmond Hospitals $296,325,732 Martha Jefferson Hospital Charlottesville Hospitals $233,558,064 Childfund International USA Richmond Civic associations $215,772,220
Hospitals 17 $1,865,789,677 Civic associations 1,056 $1,198,535,626 Ambulatory health 127 $902,568,931 Social assistance 316 $397,834,781 Nursing homes 69 $353,356,218 Schools 76 $207,962,261 Arts and recreation 337 $174,598,045 Universities 8 $154,314,720
File bylaws and articles of incorporation (the written rules of the company) with the state In Virginia, that is the State Corporation Commission This creates a “legal entity”, like a person or corporation, that can enter into contracts, own property, etc. Form a Board of Directors Apply for IRS tax-exempt status Apply to the state for permission to fundraise within the state, update annually In Virginia, that is with the Department of Agriculture and Consumer Affairs
Tax exemption! It’s a double whammy: Its income is not taxed Donations made to it may be tax deductible for the donors
Because it is a public organization, everything is public, such as salaries, expenses etc. Typically have to fundraise – all the time! Can’t get “capital” money from the stock market, have to fundraise for it. Decisions are public and open to scrutiny – Board controlled, management replaceable, mission secured
Earned Income Contributed Income Investment Income Government Income
Not quite! Form 990 – where all the good information is! What do they do? Who is on their Board of Trustees? Who gives to them? How much do they pay their top staff people? On what do they spend money?
Where 990’s live! http://www.guidestar.org/Home.aspx
1. Ultimately responsible for the organization, set the mission 2. Hire and regularly evaluate a CEO to run the day-to-day operations, suggest strategy, implement policy, etc. 3. Ensure resources are available Lead/Help fundraise Make sure investments are safe