Nonprofit or Not

bParati Nonprofit Icon

Nonprofit or fiduciary


Nonprofit or not Image

For healthcare coalitions, the choice is between establishing an independent nonprofit corporation or subletting the business and legal obligations to a third-party fiduciary agent. Like any choice, there are pros and cons...

nonprofit vs. tax-exempt

becoming a nonprofit corporation does not mean a coalition is tax-exempt

Nonprofit

Nonprofit status refers to status under state law.

The term nonprofit generally is used to describe an organization that works to serve a public purpose, rather than to provide financial benefit to any particular individual, corporation, or entity.

They are organized around a cause, mission, or community need – they are organizations that work to serve a public purpose.

They can be set up in several different legal formats, depending on the state.

Tax-exempt

Tax-exempt status refers to federal income tax exemption under the Internal Revenue Code.

Tax-exempt status exempts a nonprofit from paying corporate income tax on income generated from activities that are substantially related to the purposes for which the group was organized. People mistakenly call such organizations “501(c)’s” or “501(c)(3)’s," which refer to a specific tax category in the Internal Revenue Code.

A nonprofit organization is not automatically exempt from federal or state taxes. To become exempt, the corporation must meet certain requirements and apply with both the IRS and the State.

healthcare coalition under a third-party

healthcare coalitions that choose not to establish nonprofit corporations function much the same

third-party fiscal agent handle healthcare coalition business services Image

Healthcare coalitions that choose not to establish independent nonprofit corporations, must use a third-party fiduciary agent to apply for grants and handle business services, such as banking, insurance, legal and accounting. Letting someone else handle the business end sounds good, right? Not always.

Learn more about the pros and cons of using a fiduciary agent

the nonprofit healthcare coalition

incorporating as a nonprofit provides benefits to the coalition that help pave the way to self sustainability, but yields new responsibilities

nonprofit foundational services Image

Like for-profit corporations, nonprofit corporations need banking, accounting and insurance services, and may need to engage legal services if the situation warrants. That said, incorporating provides important benefits for the healthcare coalition. 

learn more about taking your healthcare coalition nonprofit

501(c)(3), tax deductible coalition

incorporating as a nonprofit does not require a healthcare coalition to apply for 501(c)(3) designation

nonprofit 501(c)(3) Image

Contrary to popular belief, taking a healthcare coalition nonprofit is not one and the same as taking it 501(c)(3). Becoming a nonprofit corporation is a state action that makes the coalition a legal entity, whereas obtaining a 501(c)(3) designation from the Internal Revenue Service (IRS), is a federal thing. The 501(c)(3) designation is optional and can be done at a later date.

Learn more about taking your healthcare coalition 501(c)(3)

healthcare coalition governance

coalition governance changes little when transitioning to independent nonprofit status

Healthcare Coalition Governing Documents

Healthcare coalitions that establish independent nonprofit corporations must concern themselves with living by the requirements of their corporate charter. For coalitions using third-party fiduciary agents, governance starts with their bylaws.

Learn more about healthcare coalition governance