Startup Legal Talks (9)
How American Nonprofits Can "Make Money"
When it comes to non-profit organizations, there are always some misconceptions that non-profit organizations are groups that help people with disabilities, refugees, and low-income people, but in fact, many people do not know that non-profit organizations can also be very profitable.
1. "Non-profit" does not mean "non-profit" or "non-profit"
The first misunderstanding to be ruled out is the difference between the words "non-profit", "non-profit" and "non-profit". It sounds a bit like the synonym analysis of the language test. Among them, the "camp" in the "camp" of "profit" means whether your business purpose is for profit, which is also the meaning of the non-profit organization itself, which means that your organization cannot operate for the sake of making money, which is the key point. on subjective intentions. Next, the words "profit" and "profit" are very subtle. Some people think that these two words mean the same thing, that is, they actually make money. However, some people who distinguish it in more detail will think that the "win" of "win" and "win" means that at least it looks profitable on the book, but some costs have not been deducted, so we can understand it as "gross profit". The "profit" of the latter "profit and loss" is the state of making money after the cost is really deducted, that is, the actual "net profit".
So in fact, these three words are simply explained in English as:
"Profit" seek profit
"profit" net profit
"profit" gross profit
So in other words, the key to a non-profit organization is that it is not for profit, but in the end it is possible to make a profit or to make a profit.
2. American schools and hospitals are basically non-profit organizations
Let's look at a few examples.
University of Southern California, a nonprofit organization in California.
Stanford Hospital, a nonprofit organization in California.
Caltech is also a non-profit organization in California.
After reading California, then look at other states.
University of Chicago, Illinois nonprofit.
Nonprofit organization of Emory University, Georgia.
Everyone should pay attention here that all these universities and hospitals actually belong to a Corporation in a legal nature, that is, a company, but we call them a Non-Profit Organization.
3. How nonprofits make money
So how exactly do nonprofits make money? In fact, the income of non-profit organizations mainly comes from two sources, the first is operating income, and the other is from charitable donations.
(1). Operating income
Let’s first look at operating income. This is very common. Don't think that non-profit organizations can only wait for others to donate money. Non-profit organizations can also provide products and services at a clear price.
For example, every income from hospital visits and college tuition are the most important sources of income for non-profit organizations. In addition, all of us should have been to the university visitor center, the water cups with the university logo in the gift shop, and the sweatshirts. These income are also income of non-profit organizations. Another example is a ballet company or a museum, whose income from selling tickets is also the income of non-profit organizations.
(2). Charitable donations
Donations to non-profit organizations, whether individuals or companies, can be used as their own tax-deductible deductions. Some people may say that if it is a company, I have a lot of business expenses (business expenses) that can be deducted, why do I have to use this name. It should be noted that business expenses (business expenses) cannot be deducted too much, and your accountant should tell you that the company cannot always lose money, so which business expenses (business expenses) can be deducted and which are not required, too It is very particular that reporting too much business expense will increase the possibility of being audited by the tax bureau. In contrast, charitable donations are much better and less likely to be questioned.
And from a proportional point of view, most of the income of non-profit organizations still comes from providing products or services, that is, selling things at a clear price. So don't say anything like nonprofits can't make money again.
However, knocking on the blackboard is the key point. Both types of income are income for non-profit organizations, and for us, for the former operating income, if you buy a product or a service at a non-profit organization, such as at a university souvenir shop Buying a water glass, paying for medical treatment at the hospital, and tuition fees you pay to the school are not tax deductible, but just like spending in an ordinary for-profit company, the money is spent when it is spent. For the latter charitable donations, we ordinary people can deduct these as personal tax deductions.
In this issue, we introduced the "profit model" of non-profit organizations, so in addition to open source, throttling is equally important. How do nonprofits save money? What types of nonprofit organizations are there? What is the difference between Chinese and American nonprofits? We'll take a look at the next issue.
More dry stuff, less verbose, welcome to American company law, see you in the next issue.
