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The Nonprofit

The Nonprofit . Junior Intern Program September 14, 2013. What are we going to learn ?. 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?

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The Nonprofit

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  1. The Nonprofit

    Junior Intern Program September 14, 2013
  2. What are we going to learn ? 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?
  3. What is a Nonprofit 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.
  4. What Do They Do? 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.
  5. Who owns a Nonprofit? 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.
  6. How Many People Work in Nonprofits in Virginia? 235,113, plus another 130,000 volunteers Makes it Virginia’s 3rd largest employment sector, behind retail and professional services 3x as many as the state’s finance and insurance industries!
  7. How many are there? 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
  8. Who are the largest? 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
  9. Central Virginia Nonprofits 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
  10. How Do You Start One? 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
  11. So, what’s the big advantage to being Nonprofit? Tax exemption! It’s a double whammy: Its income is not taxed Donations made to it may be tax deductible for the donors
  12. Any disadvantages? 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
  13. How are they funded? Earned Income Contributed Income Investment Income Government Income
  14. No taxes, no tax forms? 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?
  15. What is Guidestar? Where 990’s live! http://www.guidestar.org/Home.aspx
  16. So, what does the Board do? Ultimately responsible for the organization, set the mission Hire and regularly evaluate a CEO to run the day-to-day operations, suggest strategy, implement policy, etc. Ensure resources are available Lead/Help fundraise Make sure investments are safe
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