Nonprofits are usually intended to serve the community and its members. Since they are expected to benefit communities, the government offers tax advantages to help maximize the services they can offer. Many nonprofit founders may say that the "feel goods" are a benefit from starting a nonprofit, but there are tangible advantages as well. Major benefits include the following:
Limited liability protection - Directors, officers, and members usually are not held personally liable for the organization's debts and activities. Incorporating your nonprofit can help protect your assets.
Tax-exempt status - Nonprofits can apply for both federal, state, and local tax-exempt status, allowing them to devote a larger proportion of their resources to achieving their goals.
Access to grants - Some nonprofits are eligible to receive public and private grants or government funding.
Tax-deductible donations - Donors can make tax-deductible donations to most nonprofit corporations.
Lower rates on many goods and services - For example, many nonprofits are eligible for reduced postage rates—approximately 40% lower than the regular rate for commercial mailers.
Perpetuity - Nonprofits can survive their founders.
Possible state tax advantages - In addition to all these benefits, nonprofit organizations also benefit from many state specific tax advantages.
With Rocket Lawyer, you can create, store, and customize all the legal forms for your nonprofit. Become a member and form your nonprofit with our incorporation service, and enjoy the many benefits of a nonprofit organization.