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A common misconception I often hear in the startup world is that non-profits are easy and safe, since they don’t have to pay taxes, and they don’t have to make a profit for their shareholders. In reality, from the feedback I get from non-profit executives, exactly the opposite is true.

Technically speaking, in the United States, a non-profit corporation or association is one which has been exempted from Federal income taxes by meeting the criteria set out Section 501(c) of the Internal Revenue Code, most notably religious, educational, and charitable entities. Other countries have similar exemptions for similar organizations.

Yet even a non-profit has to make a profit on everything it sells, in order to cover operating expenses (salaries, offices, equipment, research, travel, etc.), unless it relies wholly on donations. Even then, the business and leadership efforts to solicit and manage donations cost real money, and may be more difficult than the marketing and sales jobs of most startups.

To read the full, original article click on this link: Startup Professionals Musings: If You Think Making Money is Hard, Try a Non-Profit