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Business
A Non-Profit corporation, also known as a Not-for-Profit corporation, is a corporation that is established with the intention of not producing a profit for the investors in it. So it is not producing dividends and other streams of income. It can and should produce an excess income to be reinvested in the corporation itself, though its charter defines what the profit can be used for. What makes a non-profit corporation unique is its tax-exempt status. The most common federal tax exemption is Section 501-C-3, according to the Internal Revenue Service (IRS) code.One key advantage is that people who donate to “501-C-3” not-for-profit corporations can claim a tax deduction. A not-for-profit corporation is formed for the purpose of serving the public in social, general welfare type activities. Other not-for–profit corporations are churches. Other corporations can be labor unions, legal services organizations, and certain types of Credit Unions.
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Some corporations that are registered with the IRS, cannot take tax-deductible donations because their missions are considered to involve too much advocacy or political action for that status. This can even include some types of political action committees. For example for the corporation for “Verified Voting.org” and are engaged in active political lobbying, you have to apply to the IRS as a 501-4 organization, which unlike a 501-3 organization, cannot take tax deductible contributions. Such an organization then set up a linked foundation that is only involved in educational Voting promotion efforts. They can be registered as a 501-3 organization, and can accept tax-deductible contributions.
Many non-profit corporations are formed with the purpose of collecting donations from the public for specific purposes; for example a Food Bank to distribute food and cook meals for low-income individuals and families.
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