{"id":27531,"date":"2025-01-20T06:09:13","date_gmt":"2025-01-20T11:09:13","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=27531"},"modified":"2025-04-15T11:36:36","modified_gmt":"2025-04-15T15:36:36","slug":"who-owns-a-nonprofit","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/who-owns-a-nonprofit\/","title":{"rendered":"Who owns a nonprofit?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/trends-insights\/\" class=\"entry-header__link\">Trends &amp; Insights<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWho owns a nonprofit?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2025-01-20T06:09:13-05:00\">January 20, 2025<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Who owns a nonprofit?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/who-owns-a-nonprofit\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n<div class=\"wp-block-post-author\">\n\t\t\t<div class=\"co-authors\">\n\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/yassirmalik\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/03\/Yassir-Malik.jpg\" class=\"entry-author__image\" alt=\"yassir-malik-profile-picture\" \/>\t\t\t\t<span class=\"entry-author__name\">Yassir Malik<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t<\/div>\n\t\t<\/div>\n\n\n\n<p>Whether you\u2019re just curious or considering starting or joining a nonprofit, you might have wondered: who actually owns and controls a nonprofit organization?<\/p>\n\n\n\n<p>Unlike for-profit businesses, where individuals or shareholders hold ownership, nonprofits operate under a distinct model with unique characteristics and management structures.<\/p>\n\n\n\n<p>Since the differences between models and their management can be confusing, this guide will help you understand how nonprofit ownership works and what sets it apart from for-profit organizations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-here-s-what-we-ll-cover\">Here&#8217;s what we&#8217;ll cover<\/h3>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-here-s-what-we-ll-cover\" data-level=\"3\">Here&#8217;s what we&#8217;ll cover<\/a><\/li><li><a href=\"#h-understanding-nonprofit-ownership\" data-level=\"2\">Understanding nonprofit ownership<\/a><\/li><li><a href=\"#h-can-you-own-a-nonprofit\" data-level=\"2\">Can you own a nonprofit?<\/a><\/li><li><a href=\"#h-nonprofit-ownership-versus-for-profit-businesses\" data-level=\"2\">Nonprofit ownership versus for-profit businesses<\/a><ul><li><a href=\"#h-the-for-profit-model\" data-level=\"3\">The for-profit model<\/a><\/li><li><a href=\"#h-the-nonprofit-model\" data-level=\"3\">The nonprofit model<\/a><\/li><\/ul><\/li><li><a href=\"#h-how-nonprofit-organizations-are-structured-and-managed\" data-level=\"2\">How nonprofit organizations are structured and managed<\/a><ul><li><a href=\"#h-key-roles-in-a-nonprofit\" data-level=\"3\">Key roles in a nonprofit<\/a><\/li><li><a href=\"#h-501-c-3-status\" data-level=\"3\">501(c)(3) status<\/a><\/li><\/ul><\/li><li><a href=\"#h-who-holds-a-nonprofit-accountable\" data-level=\"2\">Who holds a nonprofit accountable?<\/a><\/li><li><a href=\"#h-does-the-founder-own-the-nonprofit\" data-level=\"2\">Does the founder &ldquo;own&rdquo; the nonprofit?<\/a><\/li><li><a href=\"#h-can-a-nonprofit-be-sold\" data-level=\"2\">Can a nonprofit be sold?<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><\/ul><\/div>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Achieving Real-Time Visibility with Nonprofit Financial Reporting and Dashboards<\/h2>\n\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-4f992959-d198-4965-93c2-00d1d45f5e65\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1215\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1423343304-1215x810.jpg\" class=\"single-cta__image\" alt=\"A person in a blue shirt is holding a tablet, surrounded by boxes labeled &quot;donation&quot; on a table, with others working in the background.\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1423343304-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-understanding-nonprofit-ownership\"><strong>Understanding nonprofit ownership<\/strong><\/h2>\n\n\n\n<p>Before diving into how nonprofit ownership works, you must first understand the core nature of these organizations. In a nonprofit, ownership isn\u2019t about individuals or groups\u2013it\u2019s about accountability.<\/p>\n\n\n\n<p>When building or participating in one, you aim to serve the community, with every decision and resource dedicated to fulfilling your organization\u2019s mission.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-can-you-own-a-nonprofit\"><strong>Can you own a nonprofit?<\/strong><\/h2>\n\n\n\n<p>Here\u2019s the bottom line: no one can technically own a nonprofit. While for-profit companies focus on generating returns for owners, nonprofits exist to serve a mission or public good.<\/p>\n\n\n\n<p>Whether you\u2019re the founder, a board member, or a passionate volunteer, your role is to contribute to the organization\u2019s goals, not to own or profit from it.<\/p>\n\n\n\n<p>Instead, these organizations are overseen by a board of directors or trustees, whose primary responsibility is ensuring the organization stays true to its mission and operates within legal and ethical boundaries. <\/p>\n\n\n\n<p>Even founders don\u2019t own the non-profit, although they may take on leadership roles.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-nonprofit-ownership-versus-for-profit-businesses\"><strong>Nonprofit ownership versus for-profit businesses<\/strong><\/h2>\n\n\n\n<p>Although nonprofits and for-profits can have different core missions, you\u2019ll find they share many operational and structural similarities.<\/p>\n\n\n\n<p>Both require a strong <a href=\"https:\/\/www.sage.com\/en-us\/blog\/understanding-small-business-financial-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">understanding of business management<\/a> to run effectively, whether you\u2019re overseeing budgets, managing teams, or planning for long-term sustainability.<\/p>\n\n\n\n<p>For-profit businesses focus on generating profits for their owners or shareholders, while nonprofits aim to fulfill a specific public mission, such as advancing education, healthcare, or environmental conservation.<\/p>\n\n\n\n<p>Although a nonprofit may generate funds, it will only be in service to its mission.<\/p>\n\n\n\n<p>Like for-profit businesses, nonprofits must implement effective business practices to ensure any money collected and spent is handled appropriately, with due accountability.<\/p>\n\n\n\n<p>However, there\u2019s a key difference in handling revenue, which you\u2019ll read further down.<\/p>\n\n\n\n<p>To do this, nonprofits can adopt various business structures, including LLCs, unincorporated associations, or trusts.<\/p>\n\n\n\n<p>These structures allow your nonprofit to manage operations similarly to for-profit entities despite their differing goals.<\/p>\n\n\n\n<p>Here is an exploration of each model&#8217;s core characteristics\u2013the for-profit and nonprofit models\u2014to help you understand how they are structured, funded, and managed.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-for-profit-model\"><strong>The for-profit model<\/strong><\/h3>\n\n\n\n<p>For-profit businesses aim to make money for their owners or shareholders.<\/p>\n\n\n\n<p>Ownership plays a key role here, with individuals or groups investing in the company expecting financial returns. There are several types of for-profit structures, each with distinct approaches to ownership, taxes, and liability:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-sole-proprietorship\"><strong>Sole proprietorship<\/strong><\/h4>\n\n\n\n<p>This business is owned and operated by one individual who assumes all profits, losses, and liabilities.<\/p>\n\n\n\n<p>In a sole proprietorship, business income is reported directly on the owner\u2019s tax return, and the owner is personally liable for all business debts and obligations.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-general-partnership\"><strong>General partnership<\/strong><\/h4>\n\n\n\n<p>This model involves two or more individuals who share profits, losses, and liabilities equally.<\/p>\n\n\n\n<p>Unlike sole proprietorships, partnerships file a separate tax return.<\/p>\n\n\n\n<p>However, the partners still report their share of profits or losses on their tax returns, as the income passes through them directly.<\/p>\n\n\n\n<p>In terms of liability, each partner is personally liable for business debts and actions taken by other partners, making it crucial for partners to trust each other\u2019s decisions and financial management.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-corporation\"><strong>Corporation<\/strong><\/h4>\n\n\n\n<p>This business entity is owned by shareholders, and profits are distributed as dividends.<\/p>\n\n\n\n<p>Unlike sole proprietorships and partnerships, corporations are taxed separately from their owners.<\/p>\n\n\n\n<p>Corporations pay corporate income tax, and shareholders are subject to double taxation\u2014first on corporate profits and again on dividends received.<\/p>\n\n\n\n<p>Corporations are also distinct legal entities, which means that liability is limited to the corporation itself; shareholders are not personally responsible for the company\u2019s debts or legal issues. <\/p>\n\n\n\n<p>This structure protects personal assets, as only the corporation\u2019s assets can be used to settle debts.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-limited-liability-company-llc\"><strong>Limited Liability Company (LLC)<\/strong><\/h4>\n\n\n\n<p>An LLC is a flexible structure that provides the liability protection of a corporation with the tax benefits of a partnership.<\/p>\n\n\n\n<p>LLCs are considered \u201cpass-through\u201d entities for tax purposes, meaning the business income is reported on the members\u2019 tax returns, avoiding corporate income tax.<\/p>\n\n\n\n<p>LLC members are protected from personal liability for the company\u2019s debts and obligations, so personal assets are generally shielded.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-nonprofit-model\"><strong>The nonprofit model<\/strong><\/h3>\n\n\n\n<p>If you\u2019re\u2013or aim to be\u2013involved with a nonprofit, you probably know that most funding comes from donations and grants.<\/p>\n\n\n\n<p>But did you know nonprofits can also generate revenue by selling goods or services?<\/p>\n\n\n\n<p>The key difference with traditional businesses is that all income must be reinvested back into your organization\u2019s mission rather than distributed to investors or shareholders.<\/p>\n\n\n\n<p>Although nonprofits don\u2019t have traditional owners, your organization still attracts investors who believe in its goals.<\/p>\n\n\n\n<p>Instead of seeking financial returns, these supporters help advance your mission.<\/p>\n\n\n\n<p>Your nonprofit operates similarly to traditional businesses in many ways\u2014they have expenses, management strategies, and financial obligations that require careful planning and oversight.<\/p>\n\n\n\n<p>It\u2019s also important to note that your nonprofit\u2019s structures can vary.<\/p>\n\n\n\n<p>For instance, while charities are one type of nonprofit, your organization doesn\u2019t have to focus on charitable purposes.<\/p>\n\n\n\n<p>Depending on your organization\u2019s mission, it may fall under different <a href=\"https:\/\/www.irs.gov\/charities-non-profits\/other-tax-exempt-organizations\" target=\"_blank\" rel=\"noreferrer noopener\">501(c) categories<\/a>, each with specific tax designations and requirements.<\/p>\n\n\n\n<p>Knowing where your nonprofit fits can help you navigate these rules effectively.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Achieving Real-Time Visibility with Nonprofit Financial Reporting and Dashboards<\/h2>\n\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-4f992959-d198-4965-93c2-00d1d45f5e65\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1215\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1423343304-1215x810.jpg\" class=\"single-cta__image\" alt=\"A person in a blue shirt is holding a tablet, surrounded by boxes labeled &quot;donation&quot; on a table, with others working in the background.\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1423343304-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-nonprofit-organizations-are-structured-and-managed\"><strong>How nonprofit organizations are structured and managed<\/strong><\/h2>\n\n\n\n<p>A well-defined structure is crucial for maintaining transparency, accountability, and efficiency for your nonprofit\u2019s long-term effectiveness and sustainability.<\/p>\n\n\n\n<p>Below is an outline of the key roles within a nonprofit organization to help you understand who is accountable for each operation, ensuring that every area functions smoothly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-key-roles-in-a-nonprofit\"><strong>Key roles in a nonprofit<\/strong><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-board-of-directors-or-trustees\"><strong>Board of directors or trustees<\/strong><\/h4>\n\n\n\n<p>The board is responsible for overall governance, including strategic planning, financial oversight, and major decisions affecting the nonprofit\u2019s direction.<\/p>\n\n\n\n<p>Its primary role is to ensure that the organization remains focused on its mission while maintaining compliance with legal obligations.<\/p>\n\n\n\n<p>Board members typically do not receive compensation for their services and are tasked with acting in the best interests of the nonprofit and the community it serves.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-executive-team\"><strong>Executive team<\/strong><\/h4>\n\n\n\n<p>Nonprofits often have a CEO or executive director who handles the organization&#8217;s day-to-day management.<\/p>\n\n\n\n<p>The board of directors hires these leaders to implement strategic plans, manage staff, oversee operations, and meet the nonprofit\u2019s goals.<\/p>\n\n\n\n<p>While they play a crucial leadership role, they do not have ownership rights in the organization.<\/p>\n\n\n\n<p>Their primary responsibility is to align the organization\u2019s operations with its mission and ensure effective resource management.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-volunteers-and-staff\"><strong>Volunteers and staff<\/strong><\/h4>\n\n\n\n<p>Many nonprofits rely heavily on volunteers, especially smaller organizations with limited budgets.<\/p>\n\n\n\n<p>Volunteers can assist in various roles, from administrative tasks to community outreach and program delivery.<\/p>\n\n\n\n<p>Depending on your nonprofit&#8217;s size and scope, paid staff members may also be part of the team. <\/p>\n\n\n\n<p>These staff members contribute specialized skills to help the nonprofit advance its goals.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-501-c-3-status\"><strong>501(c)(3) status<\/strong><\/h3>\n\n\n\n<p>In the United States, one of the main designations for nonprofit organizations is the 501(c)(3) status.<\/p>\n\n\n\n<p>Under this section of the Internal Revenue Code, nonprofits are recognized as tax-exempt entities, which exempts them from federal income tax on donations and most other revenue sources related to their mission.<\/p>\n\n\n\n<p>While most business owners dream of not paying taxes, to qualify for and maintain <a href=\"https:\/\/www.irs.gov\/charities-non-profits\/charitable-organizations\/exemption-requirements-501c3-organizations\" target=\"_blank\" rel=\"noreferrer noopener\">501(c)(3) status<\/a>, your nonprofits must follow strict IRS guidelines, including:&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-use-of-funds-for-charitable-purposes-only\"><strong>Use of funds for charitable purposes only<\/strong><\/h4>\n\n\n\n<p>All revenue generated, including donations and any earned income, must be used exclusively for mission-related activities.<\/p>\n\n\n\n<p>Profits cannot be distributed to individuals, such as board members or founders, and any surplus must be reinvested into your organization\u2019s programs and services.<\/p>\n\n\n\n<p>Any misuse of funds discovered can lead to criminal proceedings at worst and, at best, a loss of trust in your organization and its operators.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-limitations-on-political-activities\"><strong>Limitations on political activities<\/strong><\/h4>\n\n\n\n<p>Nonprofits can\u2019t participate in political campaigns.<\/p>\n\n\n\n<p>While your organization may engage in some advocacy related to its mission, these activities must not constitute a substantial part of its operations.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-annual-financial-reporting-and-disclosure\"><strong>Annual financial reporting and disclosure<\/strong><\/h4>\n\n\n\n<p>501(c)(3) nonprofits must file an annual information return with the IRS, typically using <a href=\"https:\/\/www.sage.com\/en-us\/blog\/tips-and-tricks-for-streamlining-nonprofit-form-990-reporting\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Form 990<\/strong><\/a>, to ensure transparency.<\/p>\n\n\n\n<p>This public document allows donors and the general public to review your nonprofit\u2019s financial practices, which supports accountability.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-compliance-with-state-and-local-regulations\"><strong>Compliance with state and local regulations<\/strong><\/h4>\n\n\n\n<p>In addition to federal requirements, your nonprofit may need to comply with specific state and local regulations.<\/p>\n\n\n\n<p>This includes <a href=\"https:\/\/www.sage.com\/en-us\/blog\/cyber-security-saas-solutions-keep-nonprofit-financial-data-safe\/\" target=\"_blank\" rel=\"noreferrer noopener\">data handling<\/a>, registration for charitable solicitation, and, in some cases, independent financial audits.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-financial-audits-and-public-transparency\"><strong>Financial audits and public transparency<\/strong><\/h4>\n\n\n\n<p>While the IRS does not require all nonprofits to conduct audits, larger organizations or those receiving substantial government funding must be subject to <a href=\"https:\/\/www.sage.com\/en-us\/blog\/nonprofit-audit\/\" target=\"_blank\" rel=\"noreferrer noopener\">regular financial audits<\/a>.<\/p>\n\n\n\n<p>Many nonprofits voluntarily conduct audits to demonstrate financial responsibility and transparency. <\/p>\n\n\n\n<p>Nonprofits often make audited financial statements and annual reports available to the public and donors, enhancing credibility and trust.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-who-holds-a-nonprofit-accountable\"><strong>Who holds a nonprofit accountable?<\/strong><\/h2>\n\n\n\n<p>Unlike for-profit businesses, which are accountable to their owners or shareholders, your nonprofit is responsible to different groups.<\/p>\n\n\n\n<p>First and foremost, your organization is accountable to its <a href=\"https:\/\/www.sage.com\/en-us\/blog\/4-ways-to-position-nonprofit-board-for-success\/\" target=\"_blank\" rel=\"noreferrer noopener\">board of directors<\/a>. <\/p>\n\n\n\n<p>The board ensure that the organization operates in accordance with its mission and complies with legal and financial regulations.<\/p>\n\n\n\n<p>In addition to the board, your nonprofit is accountable to its donors and the public.<\/p>\n\n\n\n<p>Donors provide the financial resources necessary for your nonprofit to operate. They expect transparency in how their contributors are used. <\/p>\n\n\n\n<p>Many nonprofits publish annual reports or financial statements to demonstrate how they use their funds and progress toward their goals.<\/p>\n\n\n\n<p>They must all adhere to the <a href=\"https:\/\/www.sage.com\/en-us\/blog\/a-guide-to-generally-accepted-accounting-principles-gaap\/#:~:text=GAAP%20refers%20to%20a%20common%20set%20of%20accounting,years%20by%20the%20Financial%20Accounting%20Standards%20Board%20%28FASB%29.\" target=\"_blank\" rel=\"noreferrer noopener\">Generally Accepted Accounting Principles (GAAP)<\/a> set by FASB.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-does-the-founder-own-the-nonprofit\"><strong>Does the founder \u201cown\u201d the nonprofit?<\/strong><\/h2>\n\n\n\n<p>If you\u2019re considering starting a nonprofit, it&#8217;s important to know that the founder doesn\u2019t \u201cown\u201d the organization.<\/p>\n\n\n\n<p>Although this is a common misconception, once your nonprofit is legally established, it becomes a separate entity. <\/p>\n\n\n\n<p>That means it is completely independent of your control.<\/p>\n\n\n\n<p>As the founder, you might take on a key role, such as executive director or board member.<\/p>\n\n\n\n<p>However, your authority will still be limited by the organization\u2019s bylaws and subject to oversight by the board of directors.<\/p>\n\n\n\n<p>Ultimately, the board\u2014not you as the founder\u2014holds the final authority.<\/p>\n\n\n\n<p>Even if you stay actively involved or receive a salary, you must follow the board\u2019s decisions and adhere to the organization\u2019s governance rules.<\/p>\n\n\n\n<p>Understanding this structure is essential for managing your nonprofit effectively and maintaining its mission.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-can-a-nonprofit-be-sold\"><strong>Can a nonprofit be sold?<\/strong><\/h2>\n\n\n\n<p>One of the most frequently asked questions about nonprofit organizations is whether they can be sold.<\/p>\n\n\n\n<p>The short answer is no.<\/p>\n\n\n\n<p>Because no individual or group \u201cowns\u201d a nonprofit, it cannot be sold like a for-profit business. Instead, a nonprofit&#8217;s assets are considered public assets and must be used to further the organization\u2019s mission.<\/p>\n\n\n\n<p>If you\u2019re part of a nonprofit that dissolves, you must understand that its remaining assets cannot be distributed to any individual or group.<\/p>\n\n\n\n<p>Instead, they must be transferred to another nonprofit with a similar mission.<\/p>\n\n\n\n<p>In some cases, your nonprofit can merge with other organizations to pool resources and increase its impact. <\/p>\n\n\n\n<p>During a merger, your nonprofit\u2019s assets are transferred to the new entity, but the original nonprofit is not traditionally \u201csold.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\"><strong>Final thoughts<\/strong><\/h2>\n\n\n\n<p>Running a nonprofit takes more than just passion for your mission. <\/p>\n\n\n\n<p>It requires a solid understanding of how your organization is structured, who\u2019s responsible for what, and what needs to be reported.<\/p>\n\n\n\n<p>Here\u2019s some encouragement: managing your nonprofit can be much easier with the right tools.<\/p>\n\n\n\n<p>From staying on top of 501(c)(3) compliance to handling financial reporting and keeping your stakeholders informed, <a href=\"https:\/\/www.sage.com\/en-us\/industry\/nonprofit\/\" target=\"_blank\" rel=\"noreferrer noopener\">nonprofit accounting and management software<\/a> simplifies the process. <\/p>\n\n\n\n<p>It&#8217;s a great way to streamline your finances, clarify roles, and focus on achieving your mission.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re looking to join, run, or are considering starting a nonprofit, you might have wondered: who actually owns it? Explore nonprofit ownership, how these organizations are structured, and who manages them.<\/p>\n","protected":false},"author":1774,"featured_media":20198,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[44,49],"tags":[4,138,253],"business_type":[40,41],"lilypad":[],"context":[],"industry":[58],"persona":[98,96,97],"imagine_tag":[468,233,472,230],"coauthors":[509],"class_list":["post-27531","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-strategy-legal-operations","category-trends-insights","tag-business-intelligence","tag-leadership","tag-performance","business_type-small-business","business_type-growing-business","industry-nonprofit"],"sage_meta":{"region":"en-us","author_name":"Yassir Malik","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1368958588.jpg","imagine_tags":{"468":"Grow your business","233":"Medium Businesses","472":"Nonprofit","230":"Small business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/27531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1774"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=27531"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/27531\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/20198"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=27531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=27531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=27531"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=27531"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=27531"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=27531"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=27531"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=27531"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=27531"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=27531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}