Most people know how valuable owning and maintaining a home can be in order for it to last through generations in the family. Research has shown that there are over 580,000 homeless people in the U.S. And since 2016, the number of homeless individuals and families has been increasing rather than declining. In one of the major cities, about 78 thousand people are living and surviving on the streets. Therefore, this has caused a lot of concern regarding homelessness, as shelter is one of the basic needs that every individual should have, notwithstanding the socioeconomic background associated with them. One amazing thing is that various nonprofit organizations all over the country are constantly providing solutions to this problem by building houses for people who need and deserve them. And this has led to the establishment of nonprofit home builders. Some of the aims and objectives of these nonprofit home builders are to provide the necessary construction expertise required to provide shelter to other nonprofits. Nonprofit home builders are there to help low-income communities build more standard and stable lives by first building good homes for them. They are also responsible for the maintenance of houses, from providing a reliable heating system to ventilation, as well as providing a functioning air conditioning system. Now, let’s take a look at some of the requirements for nonprofit home builders.

Requirements For Nonprofit Home Builders Status

Basically, nonprofit organizations are referred to as organizations that focus mainly on a social cause in various areas, such as research, science, education, housing, and even religion. When compared to other organizations, all the revenues received by nonprofit organizations are used to sponsor their projects rather than share them amongst employees, shareholders, or even members of the organization. Generally, the Internal Revenue Service is responsible for monitoring nonprofit organizations in the U.S. Section 501(c) of the Internal Revenue Code is used to determine whether a nonprofit organization is eligible for tax-exempt status. Below are some of the requirements expected from a nonprofit home builder:

Serve The General Public

One of the major requirements for nonprofit home builders is that they must ensure they serve the general public. It is required by the Internal Revenue Service that every organization be appropriately structured and operated mainly for certain purposes. For nonprofit home builders, their main purpose is to ensure that houses are built properly for low-income communities. Also, they are expected to share both their operational and financial information with the general public in order for volunteers, donors, and founders to know how their contributions are being managed.

Tax Exemption

Nonprofit home builders also qualify for tax-exempt status from the Internal Revenue Service, as this helps them retain more revenues in the organization in order to make use of them during their building projects or other work. However, in order to be tax-exempt, they are required to request the 501(c)(3) status from the Internal Revenue Service and also meet certain requirements laid down in the Internal Revenue Code. Once the nonprofit home builders are granted tax-exempt status, they will be mandated to always meet the compliance requirements of the state agency in charge. However, the donations are tax deductible for corporations or individuals that contribute, but the organization is not required to pay taxes on the funds received. This nonprofit organization is only accountable to the volunteers, donors, and founders. And the projects undertaken assist in building public confidence in them.

Non-Political

One thing about all nonprofit organizations is the fact that they are not permitted to take part in any form of political activity or incur any cost due to political reasons. Because the nonprofit home builders are nonprofit organizations, they are required to avoid engaging in any political campaign, as this will be clearly stated in the 501(c)(3) statue. If they eventually engage in any form of political activity, such as building for a political cause or for any other reason, they risk losing their tax-exempt status with the Internal Revenue Service.

How Nonprofit Home Builders Raise Funds

As we all know, a nonprofit is in no way profit-oriented. They must, however, receive revenue that will allow them to carry out their social mission. Donations from foundations, corporations, and individuals are the primary source of revenue. major source of income for nonprofit home builders. They can also get donations for a particular project being undertaken from merchandise sales, corporations, and even private investments. As a result of the importance of this nonprofit organization in the community, they have been able to adopt various other methods of raising funds in order to be financially stable.

Overdependency of this organization on sponsorships and donations can result in having challenges with cash flow. There can be situations in which the amount of money a donor is expected to contribute is way lower than the amount of money required for the project. In order to bridge this gap, a lot of nonprofit home builders are diversifying their sources of funding to various other aspects, such as merchandise sales, private investments, and fundraising activities. The revenues received are then used to provide the necessary services to the beneficiaries, including paying staff salaries, financing ongoing projects, and various other needs. However, it is important that all expenses incurred are carefully and properly managed. Situations in which high expenses are incurred in the form of staff salaries relative to the expenses of the program itself may subject them to being scrutinized by the regulatory bodies.

Conclusion

Finally, there are lots of nonprofit home builders around the world, each one focusing on its goals and mission to provide proper homes for people in need of one. Everyone tries their best to create a positive impact by helping a friend, relative, neighbor, or just serving the community. In summary, nonprofit home builders are an organization that focuses on building houses for communities and individuals with low incomes with the revenue gotten from donations and scholarships. They also qualify for tax-exempt status in the U.S. as they are in no way required to pay taxes on the revenues received from any donations.

Learn more about GNHDC and how we work to make our mark on affordable housing.