Posts Tagged ‘donors’

Can a nonprofit go out of business?

Friday, June 18th, 2010

Yes! A nonprofit can “go out of business,” so to speak. There are all sorts of reasons why an organization would shut down. The most common reason is lack of funding. Almost all nonprofits rely on donors and foundations to cover the costs of staff salaries and all other overhead expenses. If and when funding sources dry up, many nonprofits have no option but to close their doors. Additionally, some nonprofits are actually formed with the intention of “going out of business” at a certain point – once their mission has been accomplished and they no longer need to exist.