For Profit vs Not for Profit

Grades: 
11, 12

To introduce students to the differences between businesses and nonprofit organizations and key terms used in each sector.

Lesson Rating 
0
Duration 
Print1 hour
Objectives 

Students will:

  • Compare and contrast the for profit and not for profit (civil society) sectors
  • Learn the vocabulary of 990 forms
  • Learn how an organization can receive 501 (c) (3) status    
Materials 
  • Handout: “For Profit and Not For Profit Entities” 
  • Examples of completed IRS Form 990 from nonprofit organizations (downloaded through Charity Navigator and GuideStar websites)
  • IRS Form 1023 “Application for Recognition of Exemption” and “Notice 1382 (Changes for Form 1023)”[blank form downloaded from http://www.irs.gov/pub/irs-pdf/f1023.pdf]
Vocabulary 

Nonprofit organization, Mission, Profit, 990 form, Not-for-profit, Nonprofit sector, Business sector, Private (not public), Tax exempt

Instructions

Print
  1. Presentation and discussion about the distinction between a “For Profit" (business) entity and a "Not For Profit" (or nonprofit) entity.

  2. Students review examples of completed IRS Form 990s from nonprofit organizations that illuminate the financial pictures of a nonprofit, such as expenses like program costs, assets, grants awarded (for foundations), personnel, etc. These examples are downloaded through the Charity Navigator and GuideStar websites.

  3. Students learn how a group can apply for nonprofit status from the IRS as they review IRS Form 1023 “Application for Recognition of Exemption” [blank form downloaded from http://www.irs.gov/pub/irs-pdf/f1023.pdf].

Assessment 

Class discussion reflecting students’ understanding of the material as well as class presentations on selected nonprofit agencies.