Philanthropist James Cammilleri & the Differences Between Nonprofit Organizations and Charities

First of all: if you’re among the millions of people each year who support a worthy cause (or multiple causes) in your community — or perhaps you’re moved and inspired to help out a relief effort in another part of the country or planet — then you are indeed the heroes and heroines that we need. Please keep up your efforts (or better yet, dial them up!), and continue to be a role model and example to follow for your friends, family members, colleagues, neighbors; even total strangers.

Whether you’re contributing (or plan to contribute) your money, time or both, it’s helpful and important to know the differences between two of the biggest entities on the philanthropic landscape: nonprofit organizations, and charities. Here are the key distinctions according to James Cammilleri, a successful entrepreneur, Burger King franchisee, and co-founder of the nonprofit organization Elevating Christian Ministries that is on a mission to aid the hunger crisis in Haiti.

About Charities

Charities solicit funds and in-kind donations that are monetized (e.g. office equipment, computers, clothing, etc.), in order to fulfill a clear, consistent and specific charitable mandate that typically revolves around philanthropy and social wellness.

There are many different types of charities, including health charities, animal welfare charities, international NGOs, environmental charities, arts and culture charities, educational charities — and the list goes on. Donations made to registered public charities are tax deductible. Some public charities are also supported by private foundations, which administer grants instead of delivering their own programs.

Comments James Cammilleri, whose organization Elevating Christian Ministries has helped more than 10,000 children in Haiti access nourishing food: “A source of confusion is that while all registered charities are non-profit organizations, not all non-profit organizations are charities. Essentially, a charity operates exclusively to support a specific cause; often one that is very time sensitive, such as providing aid in the aftermath of a natural disaster. Non-profit organizations can certainly function in a charitable way, but they do not necessarily need to operate exclusively for charitable purposes. For example, some non-profit organizations are mandated to raise awareness for things like civic improvement, or support education and awareness of a professional trade association.”

About Non-Profit Organizations

Like charities — and contrary to what many people believe — non-profit organizations can indeed generate profit. For example, a non-profit organization that provides used musical instruments to economically disadvantaged children could hold a bake sale and silent auction that raises thousands of dollars.

However, what matters most — and what materially distinguishes a non-profit organization from a traditional business or corporation — is not whether a non-profit organization generates profits (which as mentioned is perfectly fine and often necessary), but what it does with the funds once they enter the coffers. Specifically, non-profit organizations cannot allocate the extra funds to executives, employees, investors, or shareholders. Instead, profits must be used to further the organization’s mission and mandate. Returning to the above example, the non-profit that raised thousands of dollars through its bake sale and silent auction could use the funds to purchase more used musical instruments, so that additional children could benefit.

Comments James Cammilleri: “Non-profit organizations in the U.S. must register with the IRS and comply with a stringent set of rules and policies. In doing so, they are entitled to provide tax receipts for legitimate donations, and are exempt from paying property tax, sales tax, and federal tax. However, just like any other company, they must pay employee taxes such as Social Security and Medicare.”

The Bottom Line

Obviously, understanding the differences between non-profit organizations and charities is important; not just for generous individuals and groups that support and donate to often vital organizations, but also for those who are on the other end of the relationship and tasked with running philanthropic organizations and keeping them strong, successful and compliant.

Yet with, what matters the most in the big picture is that charities and non-profit organizations make communities, countries, and in some cases the planet a safer, cleaner and better place. It’s a work in progress and can sometimes be an uphill struggle. But according to James Cammilleri and other inspirational leaders like him, it’s without question a labor of love and worth every effort.

Co-founder of Elevated Christian Ministries focusing on providing infrastructure and food to communities in Haiti.