Non Profit vs For Profit | LadyCoders

Jan 14, 2013 by Liz

There seems to be some general confusion on the differences between non profit and for profit companies. The first thing to understand is that both types must turn a profit to grow and survive! No profit means nobody gets paid, and no company in the world can survive like that!

Non profits start with a mission. That mission might be to help a group of people, raise awareness for something, or something involving the environment. There are a wide variety of non profits out there, from churches to the Red Cross.

Non profits have a variety of ways of handling operating costs. The CFC is a really great way to check up on an organization. Here is a copy of the 2012 borchure. Scroll down to the organization list (starts on page 9) and note the % near the end of the description ? that percentage is how much of their overall profit is spent on operating costs.

The goals of the two types of companies are different. A non profit company is meant to raise funds to complete it?s stated mission. A for profit company is meant to raise funds for the owners, though there may be other missions those owners have in mind. Some profit organizations exist with missions similar to that of non profits; they both help people and make money for their owners. Some hospitals work this way.

	For Profit	Non Profit
Taxes	Pays taxes	Does not pay taxes
Profit	May use for whatever the owners wish	May only use in support of the mission, running the company, or granted to other organizations (foundations do this)
When the company ends	All company assets may go to the owners	All company assets must be given to another non-profit organization
Company owners	The people who started the organization, and other people who those original owners sold stock to.	No one owns a non profit
Records and tax returns	May be shared at the owners? discression.	Required by law to be public
Losing the company	May be sold, or control may be lost by selling off stocks	Board members may be voted out by other board members

Which is right for your new company? It depends. People tend to automatically assume that non profit companies are ?good? and for profit companies are ?bad?. Much of this has to do with publicity and the business practices of some very large corporations. There are positives and negatives to both, and your mission (and how fine grained it is) will have a direct effect on your mission. Wishing to help people does not necessarily mean that a non profit is right for you. Talk to some accountants, talk to some business lawyers, get some informed opinions on what will work best for your particular needs. It?s unfortunately not as simple as good vs bad.

Source: http://ladycoders.com/2013/01/14/non-profit-vs-for-profit/

aldon smith friday night lights nick santino bruce arians the misfits hook troy