What is a Non-Profit?

Many people who first begin fundraising do not always know what a non-profit is, and many groups assume that it does not matter whether their organization is a non-profit or not.

However, how much money you make and how you are able to use that money is determined largely by the way you are classified. A non-profit group is simply a group that is designed for a charitable purpose; no money that the group makes is used for the gain of individuals.

Rather, a non-profit uses its earnings to further its goals. Groups such as the United Way, as well as groups such as the Scouts, hospitals, and most universities are non-profit groups. There are also many smaller non-profits such as animal shelters, human rights organizations, and women’s shelters. In most cases, these groups try to make the world a better place in some way.

If this general definition fits your group you must contact your local government and ask about the process of registering as a non-profit. In most areas, you cannot advertise or claim to be a non-profit unless you are officially registered as and declared as a non-profit or charitable organization.

The procedures and qualifications for becoming this sort of group legally vary from area to area, but generally you will need to fill out forms and prove to someone that your group exists not to make money but to better society. Often, you will have to file a mandate that explains clearly what your group intends to do.

It is hard to overstate how important this step is. If you have not yet officially registered as a non-profit group, you need to phone your local city hall or mayor’s office and start the procedure of doing so.

Even if your group is new or small or has modest plans for improving society, you need to be officially registered, as this will affect how you raise money. Groups which are officially non-profit groups are eligible for all kinds of money that other groups simply do not have access to. That is why you need to register your group before you begin fund-raising in earnest.