Nonprofits have board oversight whereas most small businesses do not. In a nonprofit, the board of directors is responsible for ensuring that operations advance the organization’s mission. This involves high-level financial oversight.
Nonprofits have to live up to donor expectations. People and corporations donate money because they believe in the nonprofit’s cause. It’s implicit that the funds need to be spent the way the donors intend them to be spent: on effective programs that advance the mission—without overspending on fundraisers, administration, or expenses.
Nonprofits face more stringent audit requirements. They have to adhere to higher standards of reporting and internal controls than the majority of small businesses. The reason for this is that nonprofits are using donated money—funding from the public—and all funds must be traceable. Moreover, nonprofits are accountable for the correct use of their funds to further their missions.
Nonprofits and B Corporations might have some overlap, but they aren’t competing against each other. If anything, B Corporations represent another avenue for nonprofits to raise funds or receive in-kind donations.
Commentaires