Nonprofits, by definition, must exist for public benefit and comply with a “non-distribution constraint,” mandating that net earnings not be directly distributed to owners.
For some, nonprofits are defined by much more.
The Utah Nonprofits Association exists solely to unite more than 600 nonprofit organizations in the state, supported by more than 20 community partners. A part of the National Council of Nonprofits, it also works at the national level, promoting the interests of its organizations to government officials.
An example of one of its collaborators is the national nonprofit, Boys & Girls Clubs of America. With five distinct sites in the Greater Salt Lake area, its Lied club is located at 464 South Concord (1235 West) in Salt Lake City, serving 80 to 100 kids per day.
“I think there is definitely a reputation, a belief system that goes with nonprofits,” said Tiffany Harris, club director for the Lied Boys & Girls Club, in a telephone interview. “They give you more credibility within the community, because your main motivation is your mission. I think when people see that’s your driving force as opposed to money, they are more likely to support you.”
The Boys & Girls Club reaches out to at risk youth, proving resources and a haven away from home. According to its website, after-school hours, between 3 and 6 p.m., are when children are most likely to try drugs and when most juvenile assaults occur.
“We definitely have core members that come,” Harris said. “Most of our kids we see every day. It’s part of their routine — a lot of them walk here after school.”
With 84 percent of its children coming from families considered to be low-income, Harris said the club works to provide them with unique opportunities that might not have been afforded to them.
“We’re starting an art program, having local artists come in,” Harris said. “It’s great, because they have that background and expertise that kids crave and really love. Classes are expensive, so we try to fill that gap that kids wouldn’t get otherwise.”
The Lied club has 10 paid staff members, including four who work with elementary age children and three dedicated to the teen center. The center is open primarily during the high-risk after-school hours, opening each day at 2 p.m.
While nonprofits can apply for 27 types of tax exceptions from the Internal Revenue Service, the Boys & Girls Club functions under the common 501(c)(3). It receives the majority of its funding through local and state grants, private foundations and donations.
“That’s what a healthy nonprofit will do,” Harris said. “You can’t rely on one major funding source, because if that source pulls, your funding is gone.”
However, these organizations are not devoid of any monetary gain, which is a common misconception, said Nancy Basinger, assistant director and service learning manager at the Lowell Bennion Community Service Center at the University of Utah who works extensively with nonprofit’s rights and bylaws.
“The [nonprofit] organization must make a profit, but must also be reinvestigating its own entity,” Basinger said. “The most in-demand nonprofits are those that assist in survival.”
Basinger said one common negative theme she sees within the nonprofit industry is that there are many individuals who are passionate about a cause but have little business experience.
“A lot of [nonprofit] leaders are doing this organization on top of other things,” she said. “They’re acting as social workers and nonprofit workers and have a family and kids.”
Basinger said the passion must be balanced with experience to have a successful impact in the community. She encouraged would-be entrepreneurs to first try partnering with an existing organization before building from the ground up.
“It’s not good to have a million nonprofits competing over the same dollars, rather than a few nonprofits working together under the same dollar,” she said.
Along with its hundreds of nonprofit organizations, Utah has 7.2 active charities for every 10,000 residents, who make up the largest charitable contributors in the United States, based on income. Those living in the Beehive state are also No. 2 in the nation for self-reported volunteering.