Not-for-profit organizations play a significant role in our society by undertaking and providing funding for projects that benefit the greater good. They provide services and grants in a wide variety of areas that are of importance to the community, including supporting hospitals, educational institutions, museums and organizations dedicated to assisting those in need. A not-for-profit organization generally may not, however, be formed for financial gain, and generally cannot provide profits or excessive benefits for its insiders, donors or others outside of the charitable class for which the not-for-profit organization is formed and intended to serve. The mission of a not-for-profit organization sets forth the purpose for which the organization was formed and granted special legal not-for-profit status. This mission drives the activities carried out by the organization; the board of directors is responsible for governing the not-for-profit to carry out this mission. The assets of a not-for profit organization are intended to benefit the public good and are restricted by law toward that use alone. Thus, given the prohibition against use of not-for-profit assets for anything other than the intended charitable objective, the founders, members, directors, officers and managers of a not-for-profit will have less control over a not-for profit corporation than if they established a for-profit corporation and had conventional rights of equity owners or for-profit directors or management.
Guide to Nonprofit Governance 2019
SEC Staff Brings Down its Q1 COVID-related Reporting Guidance for Q2: Focus on Liquidity and Capital Resources, CARES Act Assistance, Ability to Continue as a Going Concern and High-Quality Financial Reporting
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