Basics of Nonprofits: What a Nonprofit Is, How it is Structured, Who Owns a Nonprofit

Nonprofit organizations play a crucial role in society, and they exist for a variety of reasons. Nonprofit organizations play a vital role in society by addressing social, environmental, and cultural issues that are not typically addressed by the for-profit sector or government.

What is a Nonprofit Organization?

A nonprofit organization is a type of entity that is organized for a particular purpose and is tax-exempt under the Internal Revenue Code. Unlike for-profit corporations, nonprofits do not have shareholders or owners who benefit from the organization’s earnings. Instead, any profits are reinvested into the organization’s mission or donated to another nonprofit. Nonprofits may operate in a variety of fields, including education, health, social services, and the arts.

How is a Nonprofit Structured?

Nonprofits can be structured in several ways, but the most common structure is a 501(c)(3) organization. This means that the nonprofit has been granted tax-exempt status by the IRS under section 501(c)(3) of the Internal Revenue Code. Other types of nonprofit structures include 501(c)(4), 501(c)(6), and 501(c)(7) organizations.

Who Owns a Nonprofit?

Nonprofits are not owned by any individual or group. Instead, they are governed by a board of directors or trustees. These individuals are responsible for making major decisions about the nonprofit’s activities, finances, and overall direction. The board of directors is typically made up of volunteers who have expertise in the nonprofit’s field of operation.

How Many Nonprofits are in the United States?

Nonprofits play a vital role in the United States, and there are many of them. According to the National Center for Charitable Statistics, there were over 1.7 million nonprofits in the United States in 2023. These nonprofits ranged from small, local organizations to large, national entities with budgets of over $100 million. According to DonorBox, the nonprofit sector is to be the third-largest employer in the United States.


Nonprofits are an important part of society, and they exist to serve a variety of purposes. They are structured in various ways and do not have owners or shareholders. Instead, they are governed by a board of directors or trustees who are responsible for making major decisions. The United States is home to over 1.5 million nonprofits, which play a crucial role in the country’s social, cultural, and economic well-being.

Caroline Grimm

Caroline Grimm is an accounting educator and a small business enthusiast. She holds Masters and Bachelor degrees in Business Administration. She is the author of 13 books and the creator of Accounting How To YouTube channel and blog. For more information visit:

Recent Posts