Nonprofit Definition:

Conducted primarily to make a profit


  • A nonprofit is permitted to raise funds by receiving public and private grant money and donations from individuals and companies.
  • Structuring an organization as a nonprofit corporation protects its directors, officers, and members from personal liability for the corporation's debts and liabilities.
  • Organizations that qualify as public charities under Internal Revenue Code 501(c)(3) are eligible for federal exemption from payment of corporate income tax.
  • Nonprofit organizations are allowed to solicit charitable donations from the public. Many foundations and government agencies limit their grants to public charities.


  • Creating a nonprofit organization takes time, effort, and money. Because a nonprofit organization is a legal entity under federal, state, and local laws, the use of an attorney, accountant, or other professional may well prove necessary.
  • As an exempt corporation, a nonprofit must keep detailed records and submit annual filings to the state and IRS by stated deadlines in order to keep its active and exempt status.
  • A nonprofit is dedicated to the public interest; therefore, its finances are open to public inspection. The public may obtain copies of a nonprofit organization’s state and Federal filings to learn about salaries and other expenditures.


  • Johnson C. Smith University
  • Belmont Community Development
  • St. Jude Children's Research Hosptial