Nonprofits and Cooperatives By: Cynthia Reifsteck, Andy Reetz, - - PowerPoint PPT Presentation

Nonprofits and Cooperatives

By: Cynthia Reifsteck, Andy Reetz, Michael Elmendorf, Mallory Mittan and Meaghan Henderson

Definition and General Characteristics

Cooperative: A business organization owned and operated by a group

• f individuals for their mutual benefit. A cooperative business, or co-
• p business, uses an integrated business structure with members of

the co-op sharing decision-making authority, profits, and liability for debts. Nonprofit Organization: Institution that functions much like a business, but does not operate for the purpose of generating profit. Which means that Nonprofits can't distribute money to shareholders. The funds of a nonprofit must stay in the corporate accounts, they can

• nly be used for salaries, expenses and activities of the nonprofit.

T ypes

Cooperatives:

• Consumer Cooperative: retail outlets owned and operated by consumers
• Service cooperatives: provide a service rather than a good
• Producer cooperatives: Agricultural marketing that helps members sell their products

Nonprofits:

• Professional Organization: Nonprofit that works to improve the image, working

conditions,and skill levels of people in particular occupations

• Business association: Promotes the collective business interests of a city, state or other

geographical area or of a group of similar businesses

• T

rade Association: Promotes the interests of particular industries

• Labor Unions: An organized group of workers whose aim is to improve working conditions,

hours, wages, and fringe benefits

Advantages

Cooperatives:

• Pay lower stabilized prices for products
• Shared Ownership/Shared risk
• Reduced expenses for operational costs

Nonprofits:

• Benefit society
• Exempt from income taxes
• Operate with partial government support (could be an advantage or disadvantage)

Disadvantages

Cooperatives:

• Longer decision making process
• Participation of all members required for success
• Extensive record keeping is necessary
• Less incentive to invest additionally

Nonprofits:

• Have to pay fees to apply for tax exempt (expensive fees, especially for small nonprofits)
• Hiring staff
• T

akes a lot of your time and energy

Examples

Nonprofits:

• The Miracle Foundation
• The Austin Zoo
• YMCA
• Make-a-Wish Foundation

Cooperatives:

• Ace Hardware
• National Cooperative Bank
• Land O' Lakes
• Dairy Farmers of America

Statement

Nonprofit Organization: We would choose to have a nonprofit organization because they help people in a community. Cooperative: We would run a cooperative because everyone whose a part of it benefits.