Perfecting the habit of properly documenting the activities of your nonprofit is one of the most important disciplines any new social entrepreneur can master. There's a well-worn cliché that says, "If it's not in writing, it didn't happen". When it…
Executive compensation is a hot-button topic for both nonprofit and for-profit companies. With the nature of compensation changing dramatically for technology and other high-growth industries, it is important to understand what is fair and competitive when setting your employee salaries.…
One of the most important things that a nonprofit can do to build a sustainable organization is to develop a robust fundraising system. Funding for nonprofits typically comes from three sources: donations, grants, and program revenue. Each of these sources has benefits and…
As a company, the Foundation Group team works with over 1,000 new, startup nonprofits each year. One of the biggest and most frequent challenges we face when working with clients is conflict-of-interest concerns. New 501(c)(3) organizations are particularly vulnerable to…
When you start a charitable organization, one of the most important decisions you’ll make is selecting your board of directors. Your board is legally responsible for governance, fiduciary, and strategic oversight of your nonprofit corporation. This usually includes ratification of your initial bylaws, as well as overseeing…
Once you know the purpose of your nonprofit organization and have an understanding of your desired ownership and controls mechanism, it is time for you to choose the type of 501(c)(3) that best represents your organization’s planned operational structure. There…
For a visionary individual who wants to start a nonprofit, the concept of ownership can be a tricky one. You’re a founder on a mission, with big ideas to help solve problems in your communities, and you want to retain…
There are many reasons why people decide to start nonprofits. Some have a general sense of wanting to help others. Many have been personally affected by a societal ill - cancer, disease, natural disaster, lack of access to basic needs…
Five months ago, three-year-old Raelee Parris passed away. I never had the pleasure of meeting Raelee, but I know people who did. It's very clear from the stories I've heard, I'm the one who missed out! He was a Super…
The concept of who owns a nonprofit organization can be hard for some to grasp, especially given that the answer is, “No one…and everyone!” We encounter this confusion with new clients on a fairly regular basis. And, given people’s understanding of how basic business operates, it is understandable. In order to fully appreciate the concept of “non-ownership”, it is helpful to first talk about the various types of business entities. Then, we’ll look at organizational purpose. By the end of the article, it should make a lot more sense.
There are several different types of business entities. For-profit companies make up most of them. Here are a few (there are others)…all of these have an owner or owners:
Sole Proprietorship: One person who conducts business for profit. The sole owner assumes complete responsibility for all liabilities and debts of the business.
General Partnership: Two or more individuals as co-owners of a for-profit business.
Corporation (for-profit): The corporation itself assumes all liabilities and debts of the Corporation. A corporation is owned by shareholders. A shareholder enjoys protection from the corporation’s debts and liabilities.
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