Today’s Wonder of the Day was inspired by Wonder Team. Wonder Team Wonders, “How Does a Nonprofit Work?” Thanks for WONDERing with us, Wonder Team!

Do you ever watch the news on television? Do you read the newspaper? If so, you’ve probably heard plenty about the stock market. What causes stock prices to rise and fall? Many things do. At its most basic, though, the stock market is affected by the profits of publicly traded companies.

What is profit? It’s the total earnings of a person or company after any costs are taken out. Let’s look at an example. Imagine you have a lemonade stand. You bought $10 worth of supplies to make lemonade. Then, you sold all the lemonade for $15. What was your profit? To find out, subtract the cost of your supplies from the amount of money you made by selling the lemonade. That’s right! You earned a profit of $5.

Did you know that not every company strives to make as much money as possible? It’s true! They’re called nonprofits. Other names for them are not-for-profit organizations or non-commercial organizations. Nonprofits often make money, but what they do with that money makes them different from for-profit businesses.

What exactly are nonprofits? They’re organizations, such as businesses or community groups. Nonprofits are usually private, which means they’re not run by the government. They also often have a philanthropic mission. Some examples include literacy, protecting the environment, and saving endangered species. Nonprofits also focus on education, safety, the arts, and various political or social reform efforts.

Legally, the thing that defines a nonprofit is what it does with the money it makes. Instead of paying out earnings to investors, nonprofits put money back into their organization’s efforts. In other words, the money is used to grow the organization and support its mission.

In most countries, nonprofits have many legal rules they must follow. This allows them to keep their nonprofit status. These rules often involve the taxes, if any, they must pay. The rules also include how nonprofits must report their earnings and what they do with them.

Would you like to start a nonprofit one day? Begin by identifying a cause you care about. Then, look for specific ways you can make a difference for that cause. Start working hard today, and in the future, you might just be part of your own successful nonprofit!

Standards: CCRA.L.3, CCRA.L.6, CCRA.R.1, CCRA.R.2, CCRA.R.4, CCRA.R.10, CCRA.SL.1, CCRA.SL.2

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