What is a downside of nonprofit fitness centers?

Tax exemption/deduction: Organizations that qualify as public charities under Internal Revenue Code 501(c)(3) are eligible for federal exemption from payment of corporate income tax. Once exempt from this tax, the nonprofit will usually be exempt from similar state and local taxes. If an organization has obtained 501(c)(3) tax exempt status, an individual's or company's charitable contributions to this entity are tax-deductible. Learn more about starting a nonprofit.

Eligibility for public and private grants: Many foundations and government agencies limit their grants to public charities. Nonprofit organizations also can offer tax deductions to individuals or businesses that give charitable contributions. Learn more about how nonprofits are funded.

Formal structure: A nonprofit organization exists as a legal entity in its own right and separately from its founder(s). Incorporation puts the nonprofit's mission and structure above the personal interests of individuals associated with it. Learn more about nonprofit boards.

Limited liability: Under the law, creditors and courts are limited to the assets of the nonprofit organization. The founders, directors, members, and employees are not personally liable for the nonprofit's debts. However, there are exceptions. A person cannot use the corporation to shield illegal or irresponsible acts on their part. Also, directors have a fiduciary responsibility; if they do not perform their jobs in the nonprofit's best interests, and the nonprofit is harmed, they can be held liable. Learn more about the legal duties of nonprofit boards.

Given these advantages, why would you not want to incorporate as a nonprofit?

Disadvantages

Cost: Creating a nonprofit organization takes time, effort, and money. Fees are required to apply for incorporation and tax exemption. The use of an attorney, accountant, or other consultant may also be necessary.

Paperwork: As an exempt corporation, a nonprofit must keep detailed records and submit annual filings to the state and IRS by stated deadlines in order to keep its active and exempt status.

Shared control: Although the people who create nonprofits like to shape and control their creations, personal control is limited. A nonprofit organization is subject to laws and regulations, including its own articles of incorporation and bylaws. In some states, a nonprofit is required to have several directors, who in turn are the only people allowed to elect or appoint the officers who determine policy.

Scrutiny by the public: A nonprofit is dedicated to the public interest; therefore, its finances are open to public inspection. The public may obtain copies of a nonprofit organization's state and Federal filings to learn about salaries and other expenditures.

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Eating healthy foods and exercising are key to weight loss. The nonprofit gym Healthworks is helping women in one low-income neighborhood of Boston lose weight and get fit.

In many low-income neighborhoods, obesity and diabetes are huge problems. Fear of crime and traffic keep many residents from exercising outdoors, and indoor gyms are often too few and too expensive.

Healthworks, a nonprofit fitness center in Boston, is trying to change that.

About 10 women were working up a sweat at a hip-hop class in Boston's Codman Square neighborhood recently. It's led by an instructor nicknamed K.J. with long dreadlocks and great moves.

But none of the women have lean, sculpted bodies. Most of them are where Tamica Toney, 36, was less than a year ago.

"I was obese," Toney says. "I was 252 pounds. No health problems, thank God for that. No sugar, no diabetes, no high cholesterol. But that was not healthy because eventually those problems would have came on. Now I am a total of 170 even."

She lost 80 pounds simply by going to the gym Monday through Friday.

Now she says she runs 3 miles a day -- even though she'd never been a runner before.

Toney says exercising at all in this working-class, ethnic neighborhood wasn't easy before Healthworks opened. The few fitness centers around were too expensive or too crowded, she says.

Toney also likes that the gym is for women only, since wearing spandex and sweat pants at a coed gym can be humiliating when you're 100 pounds overweight.

"I didn't feel ashamed or embarrassed of being big coming up in the gym," Toney says, "because we all understand each other -- versus with men and women, it's discouraging."

Mary Shaw, 51, agrees. She goes to Healthworks six days a week. She says fear of crime and traffic keep her from exercising outdoors.

"So many people here are obese and they want to walk and it is really unsafe," Shaw says.

She says she goes to Healthworks because she can afford it. Shaw lost her job cleaning trains for Amtrak about a year ago, but this gym costs her just $10 a month.

Membership fees are based on income, and the most anyone pays is $30.

Nearby doctors hand out free vouchers to the gym for patients who would benefit from exercise. That affordability lets folks in this neighborhood do what many people in more well-to-do areas take for granted.

"In middle-income communities, there's somehow an expectation that you're going to have access to gyms," says Bill Walczak, who helped make the nonprofit gym possible. "When you're in a low-income community, that stuff doesn't exist."

Walczak raised money to build the gym through his job as CEO of the Codman Square Health Center.

The Healthworks gym is also funded by revenues from the five for-profit Healthworks fitness centers in the Boston area. Those memberships cost about three times as much. But this nonprofit branch has the same type of equipment and classes, from yoga to Pilates to something called the Bodylicious Bootcamp.

Walczak says this neighborhood, and neighborhoods like it across the country, hunger for fitness centers like this.

"We're just the tip of the iceberg right here in terms of the actual need of this community to have access to indoor gyms where they can exercise," Walczak adds.

And not just exercise. A teaching kitchen will open to show members how to make healthy foods. That's because the gym's goal is to improve people's health, not just get them ready for bikini season.

Toney, who dropped 80 pounds, needs more than a new swimsuit now -- she needs a whole new wardrobe.

"I can't wait to get this next 20 pounds off of me, get cut up, get them abs coming through," Toney exclaims. "Then I'm going to shop until I can't drop!"