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5.3: Exercise- Being a Media Nonprofit

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    17699
  • Exercises

    EXERCISE: BEING A MEDIA NONPROFIT

    Learn more about the real-life logistics of being a media nonprofit.

    One of the most common questions students have about nonprofit models is how they are different from a for-profit company. In both cases, an organization needs to make more in revenue than it spends. However, there are differences in that:

    • The organization’s mission and purpose are more important than profit.
    • Ownership and leadership are different. (Unlike a business, no private person can own a nonprofit–they are led by a board of trustees or board of directors.)
    • Any excess income at a nonprofit is not distributed to shareholders or owners, but rather reinvested in the organization’s operation.
    • When a nonprofit is a 501(c)(3), it may be exempt from certain taxes and it may also offer its donors the opportunity to make tax-deductible donations.
    • A 501(c)(3) can’t attempt to influence legislation or political campaigns.

    The Balance does a great job of answering the question “How Is a Nonprofit Different from a For-Profit Business?”[1]

    To learn more, read the IRS’ requirements[2] in order for an organization to be tax-exempt as a 501(c)(3).

    Then, pick a nonprofit news organization. Locate its 990, a public form nonprofits must file annually. (Guidestar[3] is one place to search for 990s.)

    What does the organization’s 990 tell you about their annual revenue and expenditures?

    For Instructors

    Bring a media nonprofit founder into your class.

    Have students interview them and complete a profile of the nonprofit explaining their revenue sources and budget.

    Thanks to the community of practice teaching Media Innovation & Entrepreneurship for these exercise suggestions.

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    1. Joanne Fritz, "How is a Nonprofit Different from a For-Profit Business," The Balance, April 3, 2017, https://www.thebalance.com/how-is-a-nonprofit-different-from-for-profit-business-2502472.
    2. "Exemption Requirements Section 501(c)(3) Organizations," IRS.gov, https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-section-501c3-organizations.
    3. Guidestar, http://www.guidestar.org/search.