The Advantages & Drawbacks Of Nonprofits
By Josh Wagner

If you're thinking about forming a nonprofit corporation and want expert help, check out the services of Josh Wagner and PlanRight. They're affordable, user-friendly, and dedicated to helping set up nonprofits in the most efficient way possible.

What are the advantages of forming a nonprofit corporation?

1. Your organization will be exempt from state and federal income taxes.

2. You will become eligible to receive gifts, bequests and grants not normally available to businesses and individuals.

3. Donations to your organization will be tax-deductible according to state and federal guidelines.

4. You will qualify for certain employee benefits, such as accident and health insurance, pension and retirement plans, and so forth.

5. You will gain a clearer sense of organizational identity and purpose as well as the recognition and nominal prestige that come with corporate existence (people will take you more seriously).

6. You may qualify for certain property tax exemptions.

7. You will qualify for special nonprofit bulk mailing rates.

8. You will enjoy limited personal liability should legal action be brought against your organization or if your organization falls into debt.

9. Your corporation will exist in perpetuity even if you no longer maintain your connection with it.

Are there any disadvantages, limitations, and hassles involved in running a nonprofit corporation?

1. In certain cases, there are some (not insurmountable) limitations on who may receive a salary from the corporation.

2. The net profits and assets of the corporation may never be distributed to the directors or officers or any private person.

3. Your organization may not sponsor political candidates and may attempt to influence legislation only to an insubstantial degree.

4. There are strict limitations on the amounts of unrelated business activities in which your organization may engage.

5. You will be expected to maintain accurate and complete financial records of the corporation, file yearly financial returns (like any corporation or business), and hold regular meetings of the board and document those meetings in the form of minutes.

The nonprofit sector is a world of its own. It's smaller than the business world, but more complex. Certain privileges are available that are not found in the business world; at the same time, certain responsibilities are faced as well.

Our business at PlanRight is to provide clients with a complete introduction into the nonprofit sector, including generating all the documents you require to form a nonprofit corporation and apply for tax exemption, and walking those documents through the appropriate government agencies.

(You could try this on your own — it's doable. At the same time you would probably have to spend months relearning English as spoken by the IRS.)

Or you could work with us, with the assurance that we have done this hundreds and hundreds of times, and that our services are not only speedy and meticulous, but also educational to you regarding the nonprofit sector.