You already work to make the world around you better for others, but you have the notion that the best way to do even more good is to make it official with the US government.

Here’s a quick overview of what types of Nonprofits are available to be registered, as well as the Pros and Cons of registering as a nonprofit in the US.

 

How to register your entity as a nonprofit

The specific requirements and fees for forming a nonprofit vary by state, but generally, you will need to file Articles of Incorporation with the Secretary of State, obtain any necessary business licenses and permits, and apply for tax-exempt status with the Internal Revenue Service (IRS).

 

Types of Nonprofits in the US

Charitable Organizations

These are nonprofits that are formed for charitable purposes, such as providing relief to the poor, advancing education or religion, or combating community deterioration.

Social Welfare Organizations

These are nonprofits that are formed for social welfare purposes, such as improving the community or lessening the burden of government.

Trade Associations

These are nonprofits that are formed to promote the interests of a particular industry or profession.

Private Foundations

These are nonprofits that are funded by a single source, such as a family or corporation, and are typically formed to support charitable causes.

 

Registering your business as a nonprofit (Pros Vs. Cons):

Pros:

1. Tax benefits: Nonprofits are typically exempt from paying federal and state income taxes, as well as some other taxes.
2. Eligibility for grants: Nonprofits are eligible to apply for grants from government agencies and private foundations, which can provide funding for programs and activities.
3. Credibility: Nonprofit status can provide credibility and legitimacy to your organization, which can be important for fundraising and attracting volunteers.
4. Limited liability: Nonprofit organizations provide limited liability protection to their officers and directors, meaning that they are not personally liable for the debts and obligations of the organization.

Cons:

1. Limited profits: Nonprofits are not permitted to distribute profits to their members or shareholders, and must use all funds for charitable purposes.
2. Complex regulatory requirements: Nonprofits are subject to complex regulatory requirements and must comply with federal and state laws governing their operations.
3. Limited control: Nonprofits are subject to oversight by their boards of directors, which can limit the control that individual members or stakeholders have over the organization.
4. Limited flexibility: Nonprofits are subject to certain restrictions on their activities and operations, which can limit their flexibility in pursuing their missions.

 

Conclusion

Overall, registering your business as a nonprofit can provide many benefits, including tax benefits, eligibility for grants, credibility, and limited liability protection. However, it is important to consider the potential drawbacks as well, such as limited profits, complex regulatory requirements, limited control, and limited flexibility.

As always, It is recommended to consult with a legal or financial professional to determine if a nonprofit is the best choice for your business.