In order to be a nonprofit, one must be a tax-exempt organization that is defined in different sections of tax-code. At the core of these different tax-exempt codes, the organizations cannot pay out profits to any private shareholder or individual. Nonprofits can pay individuals reasonable compensation to those providing services, such as employees. A common misperception is that nonprofits cannot have a positive revenue. In fact, nonprofits should try to have a reserve fund to help ensure sustainability.