For-Profit vs. Nonprofit
You are ready to make a difference. You’ve clarified your mission and gathered your team, and now you are going to make it official. But there’s a big question: should you start a nonprofit organization or a for-profit enterprise?
No matter which business model you choose, Good Steward Financial Company can help! We are a virtual nonprofit bookkeeping service tailored specifically to bookkeeping for nonprofit organizations and small businesses.
We provide a variety of small business and 501c3 services to help your organization thrive, including:
- Full-service accounting and bookkeeping
- Fractional CFOs
- Annual audit assistance
- Payroll processing
- Cash flow management
- QuickBooks services
We are your financial partners, and we can help you make the decisions that will keep your organization fiscally healthy, including whether you should register as a nonprofit or for-profit.
What Makes a Nonprofit Different from a For-Profit?
A nonprofit is an organization whose mission is to provide a public benefit, such as a charity or foundation. They typically offer services to a community that needs it, with no expectation of making that money back. Because of their positive impact, many nonprofits qualify for tax-exempt status.
A nonprofit does not have the goal of making money; it pours all funds directly into its programs and operating expenses. Nonprofits rely on donations, grants, and fundraisers for their income.
In contrast, a for-profit organization is focused on making money. A for-profit sells a product or service and earns profit for its owner, investors, and shareholders.
While a for-profit organization may value making a positive impact on its community, the ultimate goal of this business is to make a profit.
Here’s a handy chart to help you explore the differences between non-profit and for-profit organizations:
| Nonprofit organizations | For-profit organizations | |
| Main Purpose | To benefit the community | To generate profit |
| Funding Methods | Donations and grants | Investors |
| Tax Status | Tax-exempt | Taxed on profits |
| Audience | A broader community | Specific customers |
| Leadership | Board of directors | Owner(s) and stockholders |
| Staff | A small, core group of paid employees supplemented by volunteers | Paid employees |
Because of their distinct business and tax statuses, nonprofits, and for-profits, each have to follow different government regulations, which makes it important to take special care when bookkeeping for your nonprofit.
Which Business Model is Best for You?
If you’re still unsure which business model is best for you, ask yourself the following questions:
Who is your business serving?
Are you addressing the needs of a community, or are you focusing on a specific customer?
Is there a market for your business?
Is your target audience able to pay for the service or product that you provide, or will they be unable to access it unless it is provided at little or no cost?
How important is your mission?
Are you primarily focused on making a change in a community, or are you focused on providing a product or service to an audience who can pay for it and generate profit for your organization?
As you are answering these questions, it is important to consult with a nonprofit bookkeeping service like Good Steward Financial Company.
Our bookkeeping for nonprofit professionals can shed light on the financial implications of nonprofit organizations, and we can help you decide whether registering as a 501c3 is right for you.
Nonprofit Bookkeeping Services Near Me with Good Steward Financial Company
Whether you decide to register as a small business or a nonprofit, Good Steward Financial Company is your go-to. We operate virtually, so Good Steward is always the best nonprofit bookkeeping service near me!
Our mission is to help you achieve your mission. As a Christian company, we put Biblical values first, and you can count on our integrity, compassion, and commitment to excellence.
That’s why we offer a broad range of small business and 501c3 services specifically designed to help you make a positive impact on the world, from full-service accounting and bookkeeping for nonprofit organizations to fractional CFOs and QuickBooks services.
If you’re ready to take advantage of the best nonprofit bookkeeping service around, contact Good Steward Financial Company today!