Non-Profit vs Charity... What's Best?
Jul 01, 2024
I recently had the privilege of discussing the subject of non-profits versus charities at the Homeschooling Unleashed conference in Raleigh. As Homeschooling becomes more popular, parents have been looking for ways to group together. These groups invariably want to know if they should form as non-profits or become full blown charities. My full discussion is being launched on the YouTube channel (www.YouTube.com/nclawyer) on July 4, 2024 at 4 a.m. here: https://youtu.be/5wihFXRER1U
So what are the big differences and similarities between non-profits and charities?
- Both do not have owners who take profits or losses.
- Both need some kind of corporate structure under a state or jurisdiction, with the most popular being a "non-profit corporation."
- Both need to have their corporate assets go to a 501c3 charity upon dissolution.
- Charities must have at least three independent and non-related directors or trustees on the board overseeing the charity.
- Charities must have conflict of interest policies to make sure that the people running the charity nor donors are benefitting from grants or other benefits in exchange for their donations/work.
And the big one that everyone focuses on is that donations to charities are often tax deductible whereas donations to non-profits without 501c3 status are not deductible.
There is so much more in differences, purposes, and goals between non-profits and charities, but the video this Thursday will go into that detail. The big thing to realize is there really is a way to legally run business functions through a charity without tripping over laws and regulations. Believe me, if you think you've discovered a way to get around these rules so your business or its customers can take charitable deductions while basically doing what you are already doing for business, then you are mistaken.
Please check out the full video this week to see more, and make it a great Fourth of July!
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