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What are the pros and cons of being organized as a non-profit?

I started a small business with the sole purpose of raising money for Christian missions. The business does specialty packing and shipping work, with any profit going either back into the operations, to the employees, or to charity, with a minimum of 10% going to charity (a tithe). We don't issue dividends to our shareholders (3 of us), and never intend to. I organized as a private for-profit because I was told it would give me more flexibility. We refer to ourselves as a "businestry", a business-ministry hybrid. I am wondering what others think? Was this good advice? We run an actual business, with normal customers, products, and services, not just a charity. Everyone else in our industry is for-profit. As a for-profit, I worry about equal employment opportunity and civil rights issues... but I haven't seen many non-profit retail stores or transportation companies out there. We are something in between. Argh? What is best?

Public Comments

1. Forming a non-profit organization is a great way to help your charitable cause. 4 Reasons to Incorporate as a non profit. 1. Nonprofit Corporations enjoy an exemption from corporate income taxes on profits from activities related to their purpose. 2. Qualifying for a tax exemption is harder for associations than for corporations. Without tax-exempt status, your group is unlikely to qualify for many public and private grants. 3. Donors can deduct gifts to your group on their federal and state tax income returns once your organization becomes a tax-exempt nonprofit corporation. 4. Members and directors of nonprofit corporations are generally protected from personal liability, meaning that their own money, houses, and cars aren't at risk. That's not true for an unincorporated association. Disadvantages: Disadvantages include a lot of paperwork; costs such as hiring a lawyer to prepare your papers; and time and energy to comply with regulatory demands and to grow your organization. There will be restrictions too, such as no pay for your directors, no political campaigning or lobbying, and when your organization folds, its assets must be given to another nonprofit. But if the benefits of becoming a nonprofit corporation make sense and outweigh the disadvantages, you may be ready to move ahead. "A primary difference between a nonprofit and a for-profit corporation is that a nonprofit does not issue stock or pay dividends, (for example, The Code of the Commonwealth of Virginia includes the Non-Stock Corporation Act that is used to incorporate nonprofit entities) and may not enrich its directors. However, like for-profit corporations, nonprofits may still have employees and can compensate their directors within reasonable bounds." Read more at: http://nonprofit.about.com/od/nonprofitbasics/bb/corppros.htm