My most sincere apologies for the delay. I’m certain word has spread like a wildfire and many have been eagerly awaiting my weekly deluge of nonprofit goodness. We’ll you’re in luck. Put on you’re rain slicks ‘cause this is gonna be a torrent. You’re probably asking yourself “What on earth could possibly impede the conscious stream of intellect that flows so gracefully before my eyes?” One word- taxes. Lame excuse, I know. But, there is a silver lining to the bureaucratic cloud that looms over the week of April 15th. I was, for lack of better word, inspired.

As frequently happens ‘round Duncan Manor, I was conversing with a friend about the nonprofit sector and queried, “By chance, is there any thing you find perplexing about nonprofits?” Her response, “So, nonprofits- they can’t make any money?” With enthusiasm and subtle arrogance I relay that this is a fairly common misconception. Of course they can! Otherwise we probably wouldn’t ’ve witnessed support for such fervent growth in recent years. The next line of thought asks how one really defines the nonprofit sector and what motivates persons otherwise capable of working for the “for profit” world to jump ship and go, erhm… profitless?

Most readings I’ve come across suggest that for many it is more straightforward to define what a nonprofit isn’t rather than what it is, or perhaps it is easier to contrast the differences between gov’t, private, and nonprofit sectors. Well, I’ll save the philosophical thinkings for another time. For now I’d like to focus on a few things:

-Skrilla and how nonprofits make it.

-How this eventually ties into me and my taxes

-If at all possible, I’ll work in an example relating to bikes

Cash Rules Everything Around Me.

Often times I feel that much of life’s lessons ought be learned through the lyrical waxings of the Wu-Tang Clan. The concept is no different when applied to the world of nonprofits. While volunteerism is an integral part of the nonprofit sector, there are paid employees just like anywhere else. Where a nonprofit may differ from a business is the lack of profit sharing. If the year was good for a given organization and they sold more colored bracelets, stainless steel water bottles, canvas grocery bags, or whatever hip-to- slap-your-name-on product that happened to be hella rad this year, they cannot give the extra income to officers, members, or directors. It must go back into the organization. So, to again answer my friends question in a very public forum, yes, nonprofits can and do make money on a regular basis. Most nonprofits can take in revenue any number of ways. Funds can come from individual donors, grants, membership fees, and income from goods or services provided. And, yes, employees of nonprofits can be paid competitive wages- despite the stigma associated with the sector. As of note, wages are kept in check by an unpaid board of directors. Just in case anyone was getting the idea of starting a nonprofit and paying themselves eleventy-billion dollars.

Me and my taxes. I pay them and nonprofits don’t.

I always find that quite a bit of folks I talk to are really, really interested in the tax-exempt status of nonprofits. It’s as if there is some secret society of people that don’t pay taxes. There is this surreptitious element to it- like celebrity gossip or scientology. Well, let us take a peek behind Oz’s curtain.

To clarify not all nonprofits are tax exempt, just those classified as 501(c)(3)-(27).

And, that encompasses all sorts of different types of nonprofits ranging from trade associations to social clubs. The big one, however, is the 501(c)(3). This group includes private foundations and public charities such as religious, educational, scientific organizations, among others. What makes a nonprofit that is 501(c)(3) status unique, is that contributions to such an organization are tax deductible. I made no contributions worth claiming this year, so I was outta luck. Maybe next year.

Oh and the bike example. Well, I’d like to look into this a bit more, but right now I’m thinkin’

-Charitable Organization Provides Youth Outdoor Bike Program

-Land Donated to Organization is Write Off?

-Nonprofit Owned Land Exempt from Property Taxes

I’ll try to track down a good one for ya next time.

-michael