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What are the advantages and disadvantages between profit organizations and nonprofit...

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linnie4352 | Student, Undergraduate | Salutatorian

Posted November 11, 2010 at 7:49 AM via web

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What are the advantages and disadvantages between profit organizations and nonprofit organizations?

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epollock | Valedictorian

Posted November 11, 2010 at 8:26 AM (Answer #1)

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Profit and nonprofit organizations both share the belief in sustainability and the profit making motive. In a profit organization, owners receive profits as cash, dividends or stock whereas in a nonprofit organization, most is reinvested or disbursed to outside sources. In a profit organization, founders have legal ownership, vote for board members and have a say in corporate affairs. In a nonprofit organization, founders have no legal ownership and board members can only vote for existing board member positions. A popular benefit that a nonprofit has is its ability to award employees with tax deferred annuities or tax deferred compensation, according to existing local, federal, and state statutes.

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