Definition of nonprofit organizations

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					Definition of nonprofit organizations
MGT 640--lecture

Many types of tax-exempt organizations

• See tables

To have donations be deductible
• Charities must be gifts • A charity, in the legal sense, may be more fully defined as a gift, to be applied consistently with existing laws, for the benefit of indefinite number of persons, either by bringer their mind or hearts under the influence of education or religion, by relieving their bodies from disease, suffering, or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works, or otherwise lessening the burdens of government. It is immaterial whether the purpose is called charitable in the gift itself, if it is so described as to show that it is charitable in its nature (201). • Further, it must be “given from these motives and to these ends; free from the stain or taint of every consideration that is personal, private, and selfish” (Holland, 1904, 202, emphasis added).

To have donations be deductible
• Life Cycle of an Exempt organization (// must receive exempt ruling
– – – – Apply for an Employer Identification Number (EIN) Organize under state law Apply for exemption (Form 1023) File annual exempt organization returns (990 or 990EZ) if income over $25,000 – For more information go to

Some organizations are not required to file for exemptions
• Churches and certain affiliated organizations • Organizations with less than $5,000 in annual gross receipts • Subordinate organizations • Government units including tribal governments

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