Not For Profit #001: The First Question

This distinction is pivotal to understanding why someone is meeting with me in the first place to outline their idea. A for-profit business is far less regulated, at least from a tax perspective, and means you as the owner can take home most of the profit – no questions asked.

However, non-profits are creatures of the system of regulation. Sure, you could never pursue an IRS 501(c) designation and then not have to submit to regulation, but that is just infeasible when understanding the role of non-profits in society and their balance sheets. For the lifetime of a non-profit, you need to be able to document all expenditures, donations, income and pass through the veil of IRS regulations in order to enjoy the tax benefits. Running a non-profit successfully becomes a meticulous task, with no real monetary benefit unless you are well-endowed. It is not sunshine and rainbows all the way around.

Those who run and successfully organize non-profits have an ability to be efficient and organized while still staying sympathetic to the cause that they are championing. In my opinion, those who successfully run non-profits are far more resilient than for-profit business owners. You don’t just take losses on monetarily for a limited time in building your company; you may take on losses throughout your non-profits tenure. It can be maddening and overwhelming.

So why then choose to run a non-profit? Why do something that is more than yourself? Why choose to be run by regulations from your onset?

Because you get something more out of fulfilling your passion in charity, education, medicine, religious or whatever it is. Money for you is a means to an end, really just cultivated in trying to help others through your exempt purposes. Whatever that thing is, it allows the disorganized to be organized; the fickle to be generous; and the oblivious to be meticulous. It drives you from within to do the right thing.

If that’s you, then let’s get to work on your idea.