What is a Nonprofit?
By: Colette P, Healthy Kids Running Series Intern.
When one hears the word nonprofit, often they think of a charity with volunteers whose mission is to give back to the community in some way. However, not everyone thinks of the word “charity” when they hear the word nonprofit. There are many myths and preconceived notions people have about nonprofits.
A general definition of a nonprofit is: a public charity or foundation that is tax-exempt with intent to benefit the public.
A more exact definition from the Internal Revenue Code states that there are more than “25 categories of organizations that are exempt from federal income taxes. But for most people, a nonprofit refers to what the tax code classifies as a “charitable” or 501(c) (3) organization.
What separates a charitable organization from other types of tax-exempt organizations is its purpose: it must benefit the broad public interest, not just the interests of its members.” (What is a Nonprofit)
This summer I have had the amazing opportunity of gaining insight into the world of nonprofits, as a public relations and recreational marketing intern with the Healthy Kids Running Series (HKRS).
Healthy Kids Running Series was founded by Jeff Long, whose mission is to provide kids with a positive, educational, and fun experience in the world of running. He is also passionate about combating the increasing rates of child obesity in America. The series, which has spread all across the United States, has motivated kids to be healthy and active, and has provided a fun environment for kids to improve their self esteem.
As a public relations intern, my main responsibility is to assist in managing the overall well being and image of Healthy Kids Running Series. Every day I am in contact with the dozens of community coordinators and sponsors that help HKRS around the U.S., making sure they are implementing our program to the fullest potential.
One of the biggest tasks I have at HKRS, is managing our social media and public relations campaigns. Social media is a strong part of our communications and marketing strategy. I also write weekly blog posts, update and design the national website and manage our Google AdWords accounts. Social media is one of the most important parts of a nonprofit because it helps maintain a strong and positive online presence, while allowing HKRS to generate awareness, support fundraising efforts and expand its reach.
Interning at HKRS has made me aware of the many presumptions people have about nonprofits.
The most common myth I hear interning for Healthy Kids Running Series is that nonprofit equates to no profit.
What makes nonprofits unique is that their core strategy and mission is not solely focused on the bottom line. Instead, it is their mission to benefit society, often in their own unique way. However, just because the business isn’t driven by increasing the bottom line, doesn’t mean generating revenue is not one of their goals. Nonprofits follow a strategic business model to generate revenue. Unlike a for-profit that distributes surplus profit to shareholders or owners, a nonprofit’s revenue is reinvested towards providing capital that will assist in funding the organization’s goals. Healthy Kids Running Series is a nonprofit, non-stock, no ownership organization and all profit is planned for reinvestment.
Healthy Kids Running Series gains revenue from registration fees, sponsorship and donations, which is reinvested. At Healthy Kids Running Series, revenues earned go towards paying for expenses such as staff salaries, consultants, marketing, educational materials, insurance, supplies, permits and so much more.
The second most common myth I hear is that nonprofits spend most of their money paying their employees enormous salaries.
Running a nonprofit is extremely expensive. The day to day needs and administrative cost of a non-profit add up quickly. Salaries vary between non-profits. While there are nonprofits that can afford to pay their employees large salaries, most do not. Most settle for paying competitive wages.
Nick Pitas, a professor at The Pennsylvania State University who teaches about recreation management said, “Non-profits have to be careful about how much they pay employees in salary, and walk a tightrope in some ways. If you don’t pay enough, it’s difficult to attract and retain qualified employees. If you pay too much, questions may be raised about whether or not that money could be better spent furthering the mission of the organization.”
Only 10.1 percent of Americans work for a nonprofit (Salamon). Scott Ely, a board member of Healthy Kids Running Series said, “We want to hire industry leaders and folks we know can help us deliver our mission and reach our goals. But, we also must do so as fiscally responsible as possible.”
Peter Drucker, a business management professional added,” [if] money [is] always in short supply, the nonprofits cannot add paid staff. If they want to add to their activities—and needs are growing—they have to make volunteers more productive, have to give them more work and more responsibility.” ( Drucker)
Even with over 120 races in dozen of towns across the US, and over 15,000 children running last year, HKRS only employs one full time salaried employee – the director. Healthy Kids Running Series president has elected not to take a salary. The organization has been successful with the help of Pattison Sports Group, an advisory board, a pro bono legal counsel, community coordinators, volunteers, interns and hourly, part time staff.
Interning for Healthy Kids Running Series this summer has made me more informed about the world of nonprofit organizations. Next time you hear the word nonprofit, forget the myths and assumptions you have heard in the past. Instead, remember that nonprofits do generate revenue and are permitted to make a profit. The main goal behind that profit or revenue though is not to pay enormous salaries, but rather to further the program’s mission of helping others.
What is a Nonprofit? | Independent Sector. (n.d). Retreieved June 27, 2016, from https://www.independentsector.org/nonprofit
Drucker, Peter F. “What Business Can Learn from Nonprofits.” Harvard Business Review. N.p., n.d. Web. 07 July 2016.
Salamon, Lester M., S. Wojciech Sokolowski, and Stephanie L. Geller. “Holding The Ford: Nonprofit Employment During A Decade Of Turmoil.”The John Hopkins Nonprofit Economic Data Project 16.1 (2012): 3-4.Http://ccss.jhu.edu/. John Hopkins University, Jan. 2012. Web. 7 July 2016.