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It outlines how the handbook guides readers through deciding whether an idea should be run as a for-profit business or a nonprofit, including requirements for tax-exempt status and the practical implications of governance, control, and prohibited private inurement.",{"@graph":63,"@context":118},[64,80,101],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":51,"@type":70,"position":76},"https://docshare.wps.com/template/general/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/about-501-commons-starting-a-nonprofit-organization/177973/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/about-501-commons-starting-a-nonprofit-organization/177973.png","ImageObject",442,249,{"name":88,"@type":89},"Aditya","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/vnd.openxmlformats-officedocument.wordprocessingml.document","2026-10-04","2026-09-02",true,{"@type":98,"interactionType":99,"userInteractionCount":76},"InteractionCounter",{"@type":100},"ViewAction",{"@type":102,"mainEntity":103},"FAQPage",[104,110,114],{"name":105,"@type":106,"acceptedAnswer":107},"What services does 501 Commons provide to nonprofits and related organizations?","Question",{"text":108,"@type":109},"501 Commons provides consulting, back-office management support, training workshops, and information & referral services. It also serves nonprofits through a network of 500+ Executive Service Corps members.","Answer",{"name":111,"@type":106,"acceptedAnswer":112},"How can a nonprofit and a for-profit differ in how they handle “profit” or surplus?",{"text":113,"@type":109},"Nonprofits may generate a surplus to reinvest and manage unexpected costs, but they cannot distribute it to members, directors, or officers. For-profits distribute net earnings according to ownership and governing arrangements.",{"name":115,"@type":106,"acceptedAnswer":116},"What is private inurement and why is it important for nonprofits?",{"text":117,"@type":109},"Private inurement is a prohibited arrangement where an insider with significant influence receives direct additional benefits from the nonprofit. The IRS increases oversight to prevent this practice across all nonprofits.","https://schema.org",{"og:url":78,"og:type":120,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":122,"canonical":78},"index,follow",{"doc_id":124,"site_id":56},177973,1788329940,{"code":4,"msg":5,"data":127},{"doc_id":124,"user_id":128,"nickname":88,"user_avatar":129,"doc_module":9,"category_id":50,"category_name":51,"doc_title":59,"doc_description":61,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":135,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":136,"language":137,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":138,"faqs":139,"seo_title":140,"seo_description":61,"update_tm":125,"read_time":15},962085564549,"https://ap-avatar.wpscdn.com/davatar_085a072bc5b1113ac321206ff7593b45","\u0003\n\u0004\nAbout 501 Commons\n501 Commons serves the greater Pacific Northwest by providing consulting, back office management support, training workshops, and information & referral services to nonprofits, community organizations, schools, and government offices in Washington State and beyond.\nWe are ourselves a nonprofit organization, offering an array of services, programs, and resources that touches each of the Five Elements of a Healthy Nonprofit:\nGovernance & Boards\nManagement & Culture\nPlanning, Technology, & Administration\nCommunications & Relationships\nFundraising & Financial Management\nServices are provided by staff and our network of 500+ Executive Service Corps members – skilled professionals who volunteer their time and expertise to serve the nonprofit sector. Some of our Service Corps members have experience as senior managers or executives in the business sector, and most have worked in the nonprofit sector as professional consultants, executive directors, program managers, fundraisers, or board leaders.\nTo learn more about 501 Commons and our work, visit \u0013 HYPERLINK \"http://www.501commons.org\" \u0014www.501commons.org\u0015.\n501 Commons does not endorse any product, service, or other resource listed or linked to in this guide, and we encourages potential nonprofits or organizations to contact a lawyer familiar with nonprofit law.\nWe wish you the best of luck in forming a nonprofit, should you choose to pursue that route.\nPreface\n“Generosity with wisdom is like two wheels of a cart.”\nJapanese proverb\nMany people consider forming a nonprofit because they see a problem that they believe they could address. Or they have an idea about a product or a service that would benefit people or the community. In this way, starting a nonprofit organization is just like starting a for-profit business. You have to have a good product and there has to be a “market” or a need for that product.\nRead through this handbook to get a good idea of what is involved in starting a nonprofit. This document contains numerous links to online resources. For printed reference materials, we recommend The Nonprofit Handbook by Gary M. Grobman, Starting and Building a Nonprofit: a Practical Guide by Peri H. Pakroo, and How to Form a Nonprofit Corporation by Anthony Mancuso.\n\u000f Part 1: Is your idea a nonprofit or a business?\nFirst, you need to determine if your idea is best executed through a for-profit business or a nonprofit organization. Starting a nonprofit has all the requirements of starting a business plus additional requirements, particularly if you want to be able to accept tax-deductible donations as a tax-exempt organization (for a helpful comparison, go to \u0013 HYPERLINK \"http://nccs.urban.org/faq/\" \u0014http://nccs.urban.org/faq/\u0015).\nIn a for-profit business, the owners or the people who represent the owners (for example, the board of directors) can decide what they want to do with any net earnings or “profit” generated by the business. Most for-profits are sole proprietorships, partnerships, limited liability companies, or corporations.\nNonprofits can – and should – have a “profit” or a surplus of revenues over expenditures. They need to have some money left over each year to invest in improving the organization and to protect it in the face of unexpected costs. What makes nonprofits different from for-profit corporations is that they cannot distribute their profit to the organization’s members, directors, or officers. The IRS has increased its oversight of nonprofits to prevent what is called “private inurement,” which is prohibited for all nonprofits. Private inurement happens when an insider — an individual who has significant influence over the organization — enters into an arrangement with the nonprofit and receives direct additional benefits, such as a high salary (e.g., compensation greater than what she or he provides in return) or personal gifts.\nA founder of a nonprofit organization must decide whether they are going to be the executive director or a","cbCaibySMiHfpKGo","https://ap.wps.com/l/cbCaibySMiHfpKGo","docx",240494,7,35,"English","# Preface\n## Is your idea a nonprofit or a business?\n## Why form a nonprofit corporation?","[{\"question\":\"What services does 501 Commons provide to nonprofits and related organizations?\",\"answer\":\"501 Commons provides consulting, back-office management support, training workshops, and information \\u0026 referral services. It also serves nonprofits through a network of 500+ Executive Service Corps members.\"},{\"question\":\"How can a nonprofit and a for-profit differ in how they handle “profit” or surplus?\",\"answer\":\"Nonprofits may generate a surplus to reinvest and manage unexpected costs, but they cannot distribute it to members, directors, or officers. For-profits distribute net earnings according to ownership and governing arrangements.\"},{\"question\":\"What is private inurement and why is it important for nonprofits?\",\"answer\":\"Private inurement is a prohibited arrangement where an insider with significant influence receives direct additional benefits from the nonprofit. The IRS increases oversight to prevent this practice across all nonprofits.\"}]","About 501 Commons - Starting a Nonprofit Organization | DOCX"]