Nonprofits pursue goals rather than profit, and range from political think tanks to environmental advocacy organizations. They may have tax-exempt status and rely on donations, but some generate a surplus to further their goals. Nonprofits support important social causes and may rely on unpaid volunteers. They are subject to audits and other measures to protect their integrity.
A nonprofit is an organization that pursues some sort of ideal or goal, rather than in the interest of profit. Many nonprofits serve the public interest, but some engage in private sector activities, and nonprofits range from political think tanks to environmental advocacy organizations. In many countries, nonprofits are treated differently than other businesses under the law and may have tax-exempt status and other special treatments designed to encourage the formation of nonprofits, as most governments recognize which are useful.
You may also hear a nonprofit referred to as a nonprofit or community service organization, and there are a number of other specialized terms used by various nonprofits around the world. In all cases, the distinguishing feature of a nonprofit organization is that its primary goal is not profit. However, many nonprofit organizations actually generate a profit, although the profit is referred to as a “surplus,” and funds should be used to further the organization’s goal, rather than being divided among high-ranking members of the organization.
Many nonprofits support themselves with the assistance of donations from the public and various foundations, and some use these donations to make solid investments in hopes of generating additional funds to meet operating costs. Non-profit foundations are specifically concerned with providing monetary support to other non-profit organizations: the Bill and Melinda Gates Foundation, for example, makes grants to charities in support of its causes.
Many nonprofits choose important social causes like education, healthcare, the arts, and the environment to support, and they can take a variety of forms, from organizations that send doctors to developing countries to radio stations. In many cases, a nonprofit organization relies heavily on the support of unpaid volunteers who believe in the cause supported by the organization.
There is a lot of room for abuse in the nonprofit sector, as evidenced by the hefty compensation packages for directors of some well-known nonprofits. To protect the integrity of nonprofit assets, nonprofits are required to submit supporting documents protecting their status and may be subject to audits and other investigative measures. Some nonprofits like to set up commissions to monitor their activities, in order to keep their intentions pure.
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