Understanding For-Profit and Non-Profit Organizations Marketing 1

For Profit Organization Primary goal is to generate a profit Profit is returned to owner(s) May be formed to conduct any number of lawful business activities Pays state and federal taxes on profit in accordance to state, and federal regulations Additional taxes paid on property owned Assets and property belong to owner(s) If business dissolves, company may keep or sell property Raise capital through investors- share of profit given in exchange for the investment

Non-Profit Organization Primary purpose for common cause of community- often religious, charitable, or educational purposes Profits raised MUST be re-circulated back into the organization to fulfill mission- MAY pay salaries and administrative costs Does not pay state and federal tax exemption if qualifies for 501c (3) exemption Assets belong to organization If organization dissolves, assets and property must be donated to another non-profit organization Capital raised through donations- donors may receive tax credit

Role of Profit For Profit Non-Profit Income for charitable cause Income for Owners Operate Business Re-Invest in Business to generate MORE profit for owners For Profit Income for charitable cause Non-Profit

Effects of Competition on For Profit and Non-Profit Organizations BOTH types of organizations compete for limited resources BOTH types of organizations promote and market for customers BOTH types of organizations must manage business for efficiency, profit, and positive public image to gain customers and remain competitive

Class Assignment Students will work in small groups (2-3 people per group) Select a non-profit of choice to research Prepare a PPT presentation summarizing research. Use the outline handout provided by the marketing teacher.