There is also a third possibility, one that I call a dual for-profit/non-profit structure. If you have a business that provides a service that could potentially be made available to clients in need, this structure may work for you. For example, if you teach painting, you may want to charge some clients a high fee for art lessons. But you could also teach painting to disadvantaged children, and use grant funds to reimburse yourself for the work.

In order to use this structure, you could join forces with an existing non-profit, such as the YMCA, and assist them in writing a grant to underwrite art lessons. You could also set up a new non-profit agency devoted to providing arts education to needy children, enlist interested people to operate the agency, and contract with that agency to be paid for teaching. This dual for-profit/non-profit structure can work for a variety of different businesses.