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For Profit or Non-Profit Company Structure?

Question

In terms of a ministry, how does one decide whether to make one's idea/model non-profit or profit and can you have an endeavor be both profit and non-profit (one part profit, one part not-for-profit)?

Answer

You can set up either one or both, depending upon your goals.  And, a non-profit can have revenue-generating activities.  Many ministries are connected to a for-profit company and therefore have both.   

A couple of cautions, though if you decide to set up both:
  • Be sure to have a qualified CPA and/or attorney with experience in both realms help set up the entities so you do not waste time or energy.  Look specifically for professionals that have done this sort of set up many times.
  • Realize that potential donors to your non-profit could easily be turned off by your for-profit activities and potential distraction or temptation for your non-profit to benefit your for-profit activities
  • Keep excellent records and be prepared to explain and defend your rationale for how the two entities interact and potentially benefit each other.
  • There are many IRS rules (that are sometimes in flux) on these arrangements, so be prepared for lots of paperwork and hassle.

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