You hear it all the time— words like foundations, charities, non-profit organizations, and mutual-aid societies. But, what do all of these words really mean? Do they all mean the same thing? Or, is each type of organization different?
If you have ever been curious about the differences between these types of organizations, the team at Our Future Reads is here to break it down for you.
We’ll give you the facts to help you decide which type of group is the best match for your service hours, donations, and advocacy efforts.
What is the Difference Between a Non-Profit and Not-for Profit?
Like most things in life, it all comes back to money.
The main difference boils down to the methods of accumulation and dispersion of funds. Every non-profit must function to help the broader community in some capacity. But not every “not-for-profit” group is a charitable organization.
In a “non-profit”, the funds an organization accumulates must be used to support the cause it is working towards. These funds are expected to be used to both support the organization and the mission of the non-profit.
Some of the money will, of course, go towards buying supplies, or offering direct services from the non-profit. The rest of the money will be used to pay for operating costs, such as renting a workspace, paying employees (more on that later), utility bills, transportation fees, etc.
When an organization declares itself a “not-for-profit”, all of the proceeds raised must go directly into supporting the mission or end goal.
If the not-for-profit is trying to build a tennis court, all funds from fundraising events will go into buying materials, hiring contractors, and buying space to build the tennis court.
Essentially, the set-up of a “not-for-profit” organization exists to ensure that proceeds keep the organization self-sustaining. All funds are used to maintain its operation.
However, a “non-profit” does not exist solely by fundraising efforts, and can have a profit element to its make up. But, its mission must support a community or cause at large. It does not exist simply to maintain itself.
Besides donations, a non-profit can generate funding through other sources such as federal grants, or money from a foundation.
What is a Foundation?
Every foundation is a non-profit. But not every non-profit is a foundation. Foundations function as a kind of backer for non-profits and individual recipients of charity. There are two kinds of foundations: Private and Public.
In a private foundation, the source of the funding comes from an individual person or a family. The funds are usually put into a trust and doled out to recipients accordingly. They are required to disclose all of the grants they provide every year.
Public foundations operate similarly, but they can source their funding from many different avenues. Some of their donors include government agencies, private foundations, and individual charitable contributions. Many also choose to disclose the amount of grants they pay out in a year. But they are not required to do so.
A good rule of thumb for when you hear the term “foundation” being used is that they supply the capital to propel an organization’s work forward.
And, while foundations tend to do a good amount of financial work in the world of “nonprofits”, charities, mutual-aid societies, and non-profit organizations provide the bulk of the services that people need.
What is the Difference Between a Mutual Aid Society and a Charity?
To state it simply, the source of service is the main differentiating factor between a mutual aid society and a charity.
Charities tend to have hierarchical structures and provide services from a community from an outside stand-point. While members of a charitable organization can be part of a particular community, it’s not always the case. Whether through the force of religion, relief-efforts, or simply the stand-point of funding, a charity exists outside of the community it serves, in order to obtain resources to serve it.
Mutual-aid societies work from within a community. They also provide services but they are structured as inherently part of the community they serve. Every member of the society volunteers resources in order to aid the community at large.
Is Our Future Reads a Non-Profit Organization?
We reside somewhere in the middle! Our founder is a Chicago native who started this organization from the back of a local garage. The non-profit rose from a love for community, and the readers that reside therein.
We are not strictly a charity. The regulations surrounding charities are slightly different to those governing non-profits. And while our make-up is certainly similar to a mutual aid society, our standing as an official “non-profit” defines us as such. It entitles us to petition for funding from foundations and other government agencies.
This puts us in the perfect position to deliver books and services to the burgeoning scholars, and existing bookworms, of Chicago and surrounding areas.
How Can You Help Our Future Reads?
As a non-profit organization, we rely on a combination of funds to perform our mission. We operate on a purely volunteer basis. That means that we opt to use all of the funds we collect to direct operating costs of our service.
For example, any funding we currently receive will go towards facilitating a location to house our books. We have over 20,000 books. They are ready and waiting to be distributed to multiple charities, organizations, and societies across Chicago. But we can’t do it without your help.
If you want to donate to a non-profit organization that is both part of the community it serves while also working to broaden their reach, then we are the perfect choice.
Find out how you can donate today to help those in Chicago and surrounding areas. We help build personal libraries for individuals in Chicago.
All non-profit work is to serve you and your neighbors. No matter what name you call it by, or the idiosyncrasies that differentiate it . Donate to us today!