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Entity details the differences between non profits and charities.

Often, we hear people using the words, “charity” and “nonprofit” like they are synonyms, but there are distinct differences between the two. When choosing your next volunteer venture, use this guide to distinguish the difference between charities and nonprofits.

A single person or multiple shareholders do not own nonprofits and charities. These organizations are usually committed to chasing a mission that supports social benefit. While a charity must be a nonprofit, a nonprofit is not automatically considered a charity.

A charity’s purpose is usually to benefit the public by addressing social causes like medical or disaster relief. The organization’s goal is to be philanthropic and to improve any aspect of life for those in the community. Oftentimes, the majority of the workforce in a charity is voluntary, so there is little monetary compensation.

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One of the main distinguishing characteristics of a charity is its tax standing. If the nonprofit earns more than a third of its income via public solicitation, the IRS defines it as a charity. According to section 501(c)(3) of the Internal Revenue Code, the charity has a tax-exempt status and may be exempt from state and local taxes. Some of the top charities include United Way, Goodwill and Feeding America. On your next trip to the thrift store, remember that not only are you helping the environment by recycling clothing, but you are also shopping to support a charity.

A nonprofit organization acquires this categorization legally because its net profit from donations, membership fees or business activities will not benefit any individual who owns the company. As the name tells us, nonprofit organizations serve a greater purpose other than making a profit, which is the main goal for most businesses. The organization has no ‘owners’ so any profits made will benefit the organization as a whole, whether it is distribution to salaries or investment in programs.

In addition, a nonprofit can change its status at any time by becoming a ‘for-profit’ organization in the future, whereas a charity remains a charity forever. A few of the top non-profits are the United Nations International Children’s Emergency Fund, Human Rights Watch and the Museum of Modern Art, which is one of the largest and most visited museum and provides the opportunity for the public to view art.

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Despite the differences, you can still volunteer for both types of organizations. Although volunteers often do not receive compensation, they have the chance to expand their of knowledge for a career, which can even lead to future employment. But above all, volunteers have the opportunity to build not only a community of people, but to develop a network and a sense of pride in their contributions.

Edited by Ellena Kilgallon
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