Legally,
a nonprofit organization is one that does not declare a profit
and instead utilizes all revenue available after normal operating
expenses in service to the public interest. These organizations
can be unincorporated or incorporated. An unincorporated nonprofit
is somewhat rare for while it can be given federal tax-exempt
status or the designation of being a 501(c)(3) organization as
defined by the Internal Revenue Service, it does not enjoy the
legal protection a corporation provides. When a nonprofit organization
is incorporated, it shares many traits with for-profit corporations
except that there are no shareholders.
Nonprofit organizations often are charities or service organizations;
they 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, or endowments that have large
stock funds. Most foundations give out grants to other nonprofit
organizations, or fellowships to individuals. However, the name
foundations may be used by any not-for-profit corporation -- even
volunteer organizations or grass roots groups. A nonprofit 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. |
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