Menu
Home
People
Places
Arts
History
Plants & Animals
Science
Life & Culture
Technology
Reference.org
Nonprofit organization
open-in-new
<p>A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental legal entity that operates for a collective, public, or social benefit, rather than to generate profit for private owners. Nonprofits are subject to a non-distribution constraint, meaning that any revenue exceeding expenses must be used to further the organization’s purpose. Depending on local laws, nonprofits may include <a href="/facts/Charities/x8frlCm4">charities</a>, political organizations, schools, hospitals, business associations, churches, foundations, social clubs, and cooperatives. Some nonprofit entities obtain <a href="/facts/Tax_exemption/cgsoJFNI">tax-exempt</a> status and may also qualify to receive <a href="/facts/Tax_deduction/SqF1r6Bk">tax-deductible</a> contributions; however, an organization can still be a nonprofit without having tax exemption. </p><p>Key aspects of nonprofits are their ability to fulfill their mission with respect to accountability, integrity, trustworthiness, honesty, and openness to every person who has invested time, money, and faith into the organization. Nonprofit organizations are accountable to the donors, founders, volunteers, program recipients, and the public community. Theoretically, for a nonprofit that seeks to finance its operations through donations, public confidence is a factor in the amount of money that a nonprofit organization is able to raise. Presumably, the more a nonprofit focuses on their mission, the more public confidence they will gain. This may result in more money for the organization. </p><p>There is an important distinction in the US between non-profit and <a href="/facts/Not-for-profit_organization/AmXu2c85">not-for-profit organizations</a> (NFPOs); while an NFPO does not profit its owners, and money goes into running the organization, it is not required to operate for the public good. An example is a sports club, whose purpose is its members' enjoyment. The names used and precise regulations vary from one <a href="/facts/Jurisdiction/0Kb8hao4">jurisdiction</a> to another. </p>