The non-distribution constraint stipulates that nonprofits cannot distribute any profits to stakeholders.

Question

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The non-distribution constraint is a fundamental principle for nonprofit organizations, meaning they cannot distribute profits to their members, directors, or officers as dividends or in any form of profit-sharing. Instead, any surplus must be reinvested in the organization's mission-related activities.

The Non-Distribution Constraint Stipulates That Nonprofits Cannot Distribute Any Profits