nonprofit organization

A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization (NFPO), or simply nonprofit, is a non-governmental entity that operates for a collective, public, or social benefit, rather than to generate profit for private owners. Nonprofit organizations 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 charities, political organizations, schools, hospitals, business associations, churches, foundations, social clubs, and cooperatives. In some countries nonprofit entities can obtain tax-exempt status and may also qualify to receive tax-deductible contributions; however, an organization can still be a nonprofit without having tax exemption.

Key aspects of nonprofit organizations 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.