What Is a Non-Profit?

For me, it all started my sophomore year of college. I was 17 years old and a student at Florida State University. On this particular day, I wasn’t feeling well so I went to my dorm room after class to get some rest. While I was in my bed, I felt like God vividly gave me a powerful vision of starting a non-profit. I knew that it was supposed to help students learn the things that often aren’t taught in traditional high schools, such as entrepreneurship, financial management, leadership, and self-esteem. I started writing everything down and knew that fulfilling this purpose would forever change my life as well as the lives of the students we would impact.

That is a part of my story of starting a non-profit. What is yours? You may be reading this book as a nonprofit founder, board member, volunteer, donor, non-profit professor, etc. We all have a story as to how we became passionate about helping other people. Unfortunately, our passion alone can leave us lacking critical knowledge as it relates to making decisions to legally protect ourselves and the nonprofits we care about. That is what this book is about.

We’re going to start our journey together with some important definitions. Before we can learn how to avoid the pitfalls of starting a 501c3 non-profit, we first need to know what a non-profit is so that we’re all on the same page.

A non-profit by definition is an organization that is created to advance a particular cause, but not for the purpose of making a profit. Nonprofit organizations range from large charities and foundations to small grassroots organizations that benefit a school, church or community. A nonprofit isn’t owned by any one individual but instead is run collectively by a board of directors. Also, even though a non-profit is allowed to sell goods and services and make a profit if there is a profit at the end of the year, the extra money does not go into the founder’s pockets. Instead, it is reinvested in the nonprofit to continue to further their charitable purpose (We’ll talk about how the founder of a nonprofit can legally get paid a salary later in the book but I just want to establish a framework for our discussion for now).