16 Questions
What is a key aspect of nonprofit organizations?
Accountability
What distinguishes a nonprofit organization from a business entity?
Collective, public or social benefit
What is a constraint that applies to nonprofits regarding revenues?
Commitment to the organization's purpose
Which type of organizations may seek tax-exempt status?
Churches
What is a fundamental characteristic of nonprofit organizations with regard to openness?
Transparency to the public community
What entities are nonprofit organizations accountable to?
Founders and volunteers
What is an important factor in the amount of money a nonprofit organization is able to raise?
The diversity of the activities the nonprofit is involved in
According to the National Center for Charitable Statistics (NCCS), which sector received the highest percentage of private charitable contributions in 2017?
Religious organizations
Between September 2010 and September 2014, what percentage of Americans over the age of 16 volunteered for a nonprofit?
25.3%
What distinguishes a not-for-profit organization (NFPO) from a non-profit organization in the United States?
Primarily serves its members' enjoyment
What type of organization is an example of a 501(c)(3) organization in the United States?
Religious institution
What is the primary goal of nonprofit organizations when raising funds?
Pursuing social goals
What do not-for-profit organizations (NFPOs) focus on primarily?
Generating revenue for owners
What type of organizations are considered to be community-serving nonprofits?
Aid and development programs and medical research organizations
How do nonprofits raise money?
Donations from individual donors or found
What must nonprofits bring in enough of to pursue their social goals?
Income
Study Notes
Nonprofit Organizations
- A key aspect of nonprofit organizations is that they are driven by a mission to serve a social cause, rather than to maximize profits.
Distinctions from Business Entities
- Nonprofit organizations are distinguished from business entities in that they do not distribute profits to owners or shareholders.
Revenue Constraints
- A constraint that applies to nonprofits is that any surplus funds must be reinvested in the organization, rather than being distributed as profits.
Tax-Exempt Status
- Certain organizations, such as charitable, educational, scientific, and religious organizations, may seek tax-exempt status.
Openness
- A fundamental characteristic of nonprofit organizations is transparency and openness, with many organizations making their financial information publicly available.
Accountability
- Nonprofit organizations are accountable to their stakeholders, including donors, clients, and the general public.
Fundraising
- An important factor in the amount of money a nonprofit organization is able to raise is the strength of its relationships with donors and the public.
Charitable Contributions
- According to the National Center for Charitable Statistics (NCCS), the religion sector received the highest percentage of private charitable contributions in 2017.
Volunteering
- Between September 2010 and September 2014, 25.3% of Americans over the age of 16 volunteered for a nonprofit.
Not-for-Profit vs. Non-Profit
- In the United States, a not-for-profit organization (NFPO) is distinguishable from a non-profit organization in that NFPOs are typically membership-based, while non-profits are not.
501(c)(3) Organizations
- An example of a 501(c)(3) organization in the United States is a charitable organization, such as the American Red Cross.
Fundraising Goals
- The primary goal of nonprofit organizations when raising funds is to support their social mission and goals.
Focus of NFPOs
- Not-for-profit organizations (NFPOs) focus primarily on serving their members, rather than the broader public.
Community-Serving Nonprofits
- Community-serving nonprofits are organizations that provide essential services to a specific geographic community or population.
Fundraising Methods
- Nonprofits raise money through a variety of methods, including donations, grants, and fundraising events.
Resource Needs
- Nonprofits must bring in enough revenue to pursue their social goals and maintain their operations.
Test your knowledge about nonprofit organizations and their legal and operational aspects. Learn about the non-distribution constraint and the collective, public, or social benefits they aim to achieve.
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