Another in a series of articles related to association management selected from our reading list by:
Robert O. Patterson, JD
CEO/ Principal
The Center for Association Resources, Inc.
Regarding the importance of nonprofitable organizations
Non-profitable organizations are organizations that do not distribute their surplus fund to owners or shareholders. Its essential purpose is to serve the public other than for the accumulation of profit for investors. They are also called as independent, voluntary, charitable, social sector, etc.
Non-profitable organizations are usually classified into either member serving or public serving. The non-profitable organizations may be organized as a non-profit corporation or as a trust or they may be purely informal; they also may be an association of members. Non-profitable organizations may be controlled by its members who elect the Board of Directors. Alternatively they may be a non-membership organization and the Board of Directors may elect its own successors. The two major types of non-profitable organizations are Membership and Board only. Membership organizations select the board and will have regular meetings and act as a power to amend the by-laws. But a board only organization has a self selected board, and the membership whose powers are limited to those delegated to it by the board itself.
Almost all non-profitable organizations are exempted from income tax, sales tax and also state and local properties taxes. It’s an important fact that non-profitable organization are not prohibited from making a profit, but almost all the profit must go back to the operation of the organization and so the profit cannot be distributed among the owners or investors. It can also work in different categories like education, human services, health, public-social benefit, environmental animals, art-culture, foreign affairs, religion related; etc.
Non-profitable organizations have received their present status because they relieve the government of its burden which is beneficial to the society. Non-profitable organizations receive their main source of income generated from fees for services, sales of products etc; The non-profitable organizations also receive a high source of income from governmental grants and contracts.
Thus I conclude by saying that voluntarism is a key component for non-profitable organization. And also the non-profitable organizations extend their supporting hand to the government at the time of national crisis.
The Center for Association Resources
