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.