Traditionally, the divide between a for-profit or nonprofit organization was clear: for-profit businesses would engage in revenue generation and nonprofits would engage in charitable work to solve social issues and would largely stay away from revenue generation. The rise of social enterprises in recent years, however, has made that distinction less and less clear. Social entrepreneurs are finding innovative ways to challenge the traditional thinking about nonprofit organizations (by focusing on economically sustainable models) and for-profit businesses (by focusing on solving social issues). As you set out on your mission to change the world, you will have to decide if you want to form your venture as a for-profit or nonprofit–or perhaps some hybrid of the two. The answer will largely depend on your best guess as to source of funding and your activities.
Program related investment–or PRI–is a potential source of funding for both nonprofits and for-profit social enterprises. A program related investment is an investment made by a tax-exempt private foundation that furthers the foundation’s charitable purpose while providing the foundation with a potential for financial return. The popularity of the program related investment is on the rise, but there are specific requirements that must be met to qualify.
As a California 501(c)(3) tax-exempt nonprofit organization, you will have ongoing filing requirements. Here is a breakdown of the federal and California nonprofit filing requirements: Read more
A common misconception is that 501(c)(3) tax-exempt nonprofit organizations cannot engage in legislative advocacy, or lobbying. While nonprofit lobbying laws strictly prohibit tax-exempt nonprofit organizations from supporting or contributing to a political candidate, they do not entirely prohibit them from lobbying. Read more
Nonprofit organizations are finding it more and more challenging to access much needed capital to carry out their mission-related activities. With increasing competition for a decreasing supply of grants from institutions and the government, nonprofits have had to get creative by turning to alternative sources of funding, including crowd source funding among others. You may have asked yourself, “can nonprofits sell products?” Yes, but with some restrictions!
One often overlooked method to build a sustainable nonprofit is by generating income through the sale of goods or services. Unfortunately, many nonprofits rule out this source of capital because they mistakenly believe that nonprofits must rely solely on grants and donations. Read more
Crowd source funding, or crowdfunding, is an innovative method for businesses and organizations to raise small amounts of money from a large base of individuals. Crowdfunding is particularly helpful for nonprofit organizations, as it allows them to carry out their programmatic activities without being heavily reliant on donations and grants from wealthy individuals, institutions, and the government, while at the same time engaging members of the community. But nonprofit entrepreneurs are well advised to pay close attention to nonprofit crowdfunding laws of different states. Read more