Official Definition of Non-Profit?

[fiyero8132]

Posted: 10/7/05 at 10:13pm

I need to know wether to call my theatre group profit or non-profit. what is the exact definition? i don't want to get in trouble for anything. Thanks.

[MusicalComedyMan]

Posted: 10/7/05 at 10:18pm

Its what you call your group - its how you are organized and recognized by the IRS.

[Yankeefan007]

Posted: 10/7/05 at 10:19pm

a 'group' that doesnt have to pay taxes on their earnings.

[voztimbrada]

Posted: 10/7/05 at 11:37pm

The vast majority of regional theatre companies are non-profit organizations. Places like dinner theatres that tend to run 6 or 7 nights a week year round, are often FOR profit organizations, as they sell a ton of tickets, as well as other services, dinner, etc. Making for a lot of extra income. Basically, if a major profit is being pocketed by the organization at large, the IRS would require a for profit status. But most regional companies either don't break even, barely break even, or get just a little ahead. Paying employees, producers, etc. doesn't necessarrily count as profit. But if the over all goal of a company is to make money over and above recouping expenses (Broadway shows, national tours, etc.) it would be considered for profit. How the IRS determines this is little less clear. There are certain pre-requisites that are required for both. I think there are caps on the amount of extra money a non-profit orgaization can make. Basically, all profits have to be poured back into the companies expenditure for it to remain non-profit. As soon as someone starts pocketing the profits, (aside from paying employees, which would be included in running expenses) it's techically for profit. Obviously the tax breaks are a lot different between the two as well. Anyway, that's my impression of the differences.