Types of OrganizationsMarketing 1

Competency #34

Three Categories of Organizations

For Profit

In business to make profit from operations

Non-Profit

In business to fund cause

Government

In businesses to finance governments services

Understanding For-Profit and Non-Profit Organizations

For Profit Organization

Primary goal is to generate a profit Profit is returned to owner(s) May be formed to conduct any number of

lawful business activities Pays state and federal taxes on profit in

accordance to state, and federal regulations Additional taxes paid on property owned Assets and property belong to owner(s) If business dissolves, company may keep or

sell property Raise capital through investors- share of profit

given in exchange for the investment

Non-Profit Organization Primary purpose for common cause of community- often religious,

charitable, or educational purposes

Profits raised MUST be re-circulated back into the organization to fulfill mission- MAY pay salaries and administrative costs

Does not pay state and federal tax exemption if qualifies for 501c (3) exemption

Assets belong to organization

If organization dissolves, assets and property must be donated to another non-profit organization

Capital raised through donations- donors may receive tax credit

Role of Profit

Income for Owners

Operate Business

Re-Invest in Business to generate MORE profit for owners

For Profi

tIncome for charitable cause

Operate Business

Non-Profi

t

Effects of Competition on For Profit and Non-Profit Organizations

BOTH types of organizations compete for limited resources

BOTH types of organizations promote and market for customers

BOTH types of organizations must manage business for efficiency, profit, and positive public image to gain customers and remain competitive

Class Assignment

Students will work in small groups (2-3 people per group)

Select a non-profit of choice to research

Prepare a PPT presentation summarizing research. Use the outline handout provided by the marketing teacher.