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I'm from Spain, so my knowledge may not be translatable, but I will give it a crack.

A business that is set up as a "non-profit" means that it can't pay dividends. If the business earns one million dollars, I can't profit from it. This does not mean there aren't people in the organization with salaries. Sometimes big salaries.

You can have a "for-profit" company owned by a "non-profit" one. The dividends paid by the "for-profit" go to the "non-profit" but those can only be reinvested. In a way, yes, "non-profitness" is inherited.

I guess that the "for-profit" organization provides legal benefits. If one of your child companies goes bankrupt, it shouldn't affect the other ones nor the parent company. I have a few more guesses but I am not confident enough to write about them, especially when I am not from the US.



As far as I know (not a lawyer or CPA) the US non-profits are absolutely the same, your description is accurate.




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