FCFL is a Not-For-Profit

From Fat Cat Fab Lab

FCFL is a Not-For-Profit

Fat Cat Fab Lab is a not-for-profit organization with the goal of [insert mission statement]. That means volunteer-led projects, volunteer board, rotating members and shifting time commitments.

What is a Not-For-Profit?

Not-for-profit (NFP) and nonprofit (NP) organizations share many similarities, the primary being that unlike for-profit organizations, most of their revenue must go back into the organization instead towards individuals or shareholders. That doesn’t mean NFPs or NPs do not pay employees or cannot earn a “profit”, it just means that the most of the money must go towards the mission or growth of the organization.

Many NFPs also rely on volunteer work by their members to help keep the place running smoothly. Governance is usually distributed among volunteers with defined roles to both do the work and provide checks and balances. Members vote on initiatives and where to spend the organizations money. One good side effect is pride in the accomplishments and the sense of ownership of the future of the organization. Not to mention organizational resilience as members come and go or are out sick or on vacation.

In contrast, a for-profit small business is usually run by one or two people that decide on what projects take priority, how to use the office space, and where to spend the money. The business owners may consult other people’s opinions, but most decisions are ultimately theirs. They may also enjoy special privileges, a bigger office, or other compensation as incentives since they bear the sole risk and responsibility of keeping the organization functioning.

Not-For-Profit vs. Non-Profit: What’s the Difference?

A not-for-profit organization doesn’t tax-exempt status, except in limited circumstances. That means they must file taxes and pay income tax on the money they receive. Like non-profits, they don’t earn profits for their owners. Any money that comes in is reinvested into the business and funding its operations and initiatives. In that sense, a not-for-profit is very much like a non-profit.

In terms of structure, not-for-profits can choose to incorporate or not. Not-for-profits may be run by volunteers or have part and full-time employees. If employees are paid a salary for their work, then the not-for-profit is responsible for paying payroll tax on that money.

What type of nonprofit is Fat Cat Fab Lab, Inc?

FCFL is officially set up as a C-Corp, intended to operate as a not-for-profit in New York State, though it has not filed as one of the official federal designations - e.g 501(c)(4) is a social welfare organization, such as a civic organization or a neighborhood association. A 501(c)(7) organization is a social or recreational club. As such, Fat Cat Fab Lab has filed this Certificate of Incorporation with New York State.