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Understanding For-Profit and Non-Profit Organizations
Marketing 1
For Profit Organization• Primary goal is to generate a profit• Profit is returned to owner(s)• May be formed to conduct any number of lawful business
activities• Pays state and federal taxes on profit in accordance to
state, and federal regulations• Additional taxes paid on property owned• Assets and property belong to owner(s)• If business dissolves, company may keep or sell property• Raise capital through investors- share of profit given in
exchange for the investment
Non-Profit Organization• Primary purpose for common cause of community- often
religious, charitable, or educational purposes• Profits raised MUST be re-circulated back into the
organization to fulfill mission- MAY pay salaries and administrative costs
• Does not pay state and federal tax exemption if qualifies for 501c (3) exemption
• Assets belong to organization• If organization dissolves, assets and property must be
donated to another non-profit organization• Capital raised through donations- donors may receive tax
credit
Role of Profit
Income for Owners
Operate Business
Re-Invest in Business to generate MORE profit for owners
For Profit
Income for charitable cause
Operate Business
Non-Profit
Effects of Competition on For Profit and Non-Profit Organizations
• BOTH types of organizations compete for limited resources
• BOTH types of organizations promote and market for customers
• BOTH types of organizations must manage business for efficiency, profit, and positive public image to gain customers and remain competitive
Class Assignment
• Students will work in small groups (2-3 people per group)
• Select a non-profit of choice to research• Prepare a PPT presentation summarizing
research. Use the outline handout provided by the marketing teacher.