How you decide to run your organization is largely dependent on whether it will be functioning as a non-profit or for-profit organization.
Some of the main differences between the two are as follows:
For Profit Business:
- Motive is to make profit.
- Operates as a business and is subject to reporting as such each year to the IRS.
- All income is taxable.
- Cannot use volunteers, must pay all workers.
- Operated by an individual who is the owner and takes sole responsibility for the business.
501(c)(3) Non-Profit Organization:
- Motive is to accomplish/further a mission.
- Operates as a not-for-profit organization and reports as such each fiscal year to the IRS.
- May receive tax-exemption from the IRS and tax-deductible donations.
- Can use volunteers.
- Board of Directors controls the organization. A non-profit organization is not owned by anyone.
- Laws vary by state, but you may be a “self-declared” non profit if gross receipts total less than $5,000 in a fiscal year.
Most homeschool organizations end up going the non-profit route, as they are often led by volunteers and typically mission-driven. If you know the heart behind the “why” of your organization, considering the above points should help you easily see what route will fit your community’s goals.
