Nonprofit organization
Encyclopedia
Nonprofit organization is neither a legal nor technical definition but generally refers to an organization
Organization
An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...

 that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends. States in the United States defer to the IRS designation conferred under United States Internal Revenue Code Section 501(c), when the IRS deems an organization eligible. They may or may not have shareholders.

While Not-for-profit organizations are permitted to generate surplus revenues they must be retained by the organization for its self-preservation, expansion, or plans. NPOs have controlling members or boards. Many have paid staff including management, while others employ unpaid volunteers and even executives who work without compensation (or that work for a token fee, such as $10 per year). Where there is a token fee, in general, it is used to meet legal requirements for establishing a contract between the executive and the organization.

Designation as a non-profit and an intent to make money are not related in the United States. This means nothing can be conferred by the declaration. It is unclear whether or not this holds outside of the U.S. In the United States, such inference is the purpose of the Internal Revenue Code, Section 501(c). The extent to which an NPO can generate surplus revenues may be constrained or use of surplus revenues may be restricted.

Nature and goals

Some NPOs may also be a charity or service organization; they may be organized as a not-for-profit corporation or as a trust
Charitable trust
A charitable trust is an irrevocable trust established for charitable purposes, and is a more specific term than "charitable organization".-United States:...

, a cooperative
Cooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...

, or they exist informally. A very similar type of organization termed a supporting organization
Supporting organization (charity)
A supporting organization, in the United States, is a public charity created by the U.S. Internal Revenue Code in . A supporting organization either makes grants to, or performs the operations of, a public charity similar to a private foundation...

 operates like a foundation, but they are more complicated to administer, hold more favorable tax status and are restricted in the public charities they support.

Legal aspects

NPOs have a wide diversity of structures and purposes. For legal classification, there are, nevertheless, some elements of importance:
  • Economic activity.
  • Supervision and management provisions.
  • Representation.
  • Accountability and Auditing provisions.
  • Provisions for the amendment of the statutes or articles of incorporation.
  • Provisions for the dissolution of the entity.
  • Tax status of corporate and private donors.
  • Tax status of the foundation.


Some of the above must be, in most jurisdictions, expressed in the charter of establishment. Others may be provided by the supervising authority at each particular jurisdiction.

While affiliations will not affect a legal status, they may be taken into consideration by legal proceedings as an indication of purpose.

Most countries have laws which regulate the establishment and management of NPOs, and which require compliance with corporate governance
Corporate governance
Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...

 regimes. Most larger organizations are required to publish their financial reports detailing their income and expenditure publicly.
In many aspects they are similar to corporate business entities though there are often significant differences. Both not-for-profit and for-profit corporate entities must have board members, steering committee members, or trustees who owe the organization a fiduciary duty of loyalty and trust. A notable exception to this involves churches, which are often not required to disclose finances to anyone, including church members.

Formation and structure

In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, nonprofit organizations are formed by filing bylaws and/or articles of incorporation
Articles of Incorporation
The Articles of Incorporation are the primary rules governing the management of a corporation in the United States and Canada, and are filed with a state or other regulatory agency.An equivalent term for LLCs in the United States is the Articles of Organization...

 in the state in which they expect to operate. The act of incorporating creates a legal entity enabling the organization to be treated as a corporation by law and to enter into business dealings, form contracts, and own property as any other individual or for-profit corporation may do.

Nonprofits can have members but many do not. The nonprofit may also be a trust or association
Voluntary association
A voluntary association or union is a group of individuals who enter into an agreement as volunteers to form a body to accomplish a purpose.Strictly speaking, in many jurisdictions no formalities are necessary to start an association...

 of members. The organization may be controlled by its members who elect the Board of Directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...

, Board of Governors
Board of governors
Board of governors is a term sometimes applied to the board of directors of a public entity or non-profit organization.Many public institutions, such as public universities, are government-owned corporations. The British Broadcasting Corporation was managed by a board of governors, though this role...

 or Board of Trustees. Nonprofits may have a delegate structure to allow for the representation of groups or corporations as members. Alternatively, it may be a non-membership organization and the board of directors may elect its own successors.

The two major types of nonprofit organization are membership and board-only
Board-only
A board-only organization is one that is managed by a board that is self-appointed or otherwise not accountable to a base of members through elections, a delegate body, etc. The growing trend to switch toward this type of structure is controversial. O'Regan & Oster have found that large, more...

. A membership organization elects the board and has regular meetings and power to amend the bylaws. A board-only organization typically has a self-selected board, and a membership whose powers are limited to those delegated to it by the board. A board-only organization's bylaws may even state that the organization does not have any membership, although the organization's literature may refer to its donors as "members"; examples of such organizations are Fairvote
FairVote
FairVote is a U.S. non-profit organization based in Takoma Park, Maryland, whose mission is to achieve universal access to participation, a full spectrum of meaningful ballot choices and majority rule with fair representation for all...

 and the National Organization for the Reform of Marijuana Laws. The Model Nonprofit Corporation Act
Model Nonprofit Corporation Act
The Model Nonprofit Corporation Act is model legislation prepared by the of the Business Law Section of the American Bar Association . The MNCA is a model set of statutes governing nonprofit corporations proposed for adoption by state legislatures....

 imposes many complexities and requirements on membership decision-making. Accordingly, many organizations , such as Wikimedia, have formed board-only structures. The National Association of Parliamentarians
National Association of Parliamentarians
The National Association of Parliamentarians , is the largest non-profit association of professional parliamentarians in the world.NAP was organized in 1930. As of June 2008, NAP had a membership of about 3,560 parliamentarians in all 50 U.S. states, Canada, and internationally...

 has generated concerns about the implications of this trend for the future of openness, accountability, and understanding of public concerns in nonprofit organizations. Specifically, they note that nonprofit organizations, unlike business corporations, are not subject to market discipline
Market discipline
Buyers and sellers in a market are said to be constrained by market discipline in setting prices because they have strong incentives to generate revenues and avoid bankruptcy...

 for products and shareholder discipline of their capital; therefore, without membership control of major decisions such as election of the board, there are few inherent safeguards against abuse. A rebuttal to this might be that as nonprofit organizations grow and seek larger donations, the degree of scrutiny increases, including expectations of audited financial statements.

Tax exemption

In many countries, nonprofits may apply for tax exempt status, so that the organization itself may be exempt from income tax and other taxes. In the United States, to be exempt from federal income taxes the organization must meet the requirements set forth by the Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...

.

Australia

In Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...

, nonprofit organisations can be categorized variously: Unincorporated Associations, Co-operative Societies, Incorporated Associations, Not-for-profit Companies, and Trusts. A Nonprofit organisation in Australia can have a number of legal formats depending on the needs and activities of the organisation in question. As a legal entity, the organisation may be a co-operative society, a company limited by guarantee, an incorporated association or society by the Associations Incorporation Act 1985 or an incorporated association or council by the Commonwealth Aboriginal Councils and Associations Act 1976.

Canada

Canada allows nonprofits to be incorporated or unincorporated. Nonprofits may incorporate either federally (under Part II of the Canada Corporations Act) or provincially, by widely varying provincial legislation. Many of the governing Acts for Canadian nonprofits date to the early 1900s, meaning that nonprofit legislation has not kept pace with that governing for-profit corporations, particularly as regards corporate governance
Corporate governance
Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...

. Federally and in some provinces (such as Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....

), incorporation is by way of Letters Patent
Letters patent
Letters patent are a type of legal instrument in the form of a published written order issued by a monarch or president, generally granting an office, right, monopoly, title, or status to a person or corporation...

, and any change to the Letters Patent (even a simple name change) requires formal approval by the appropriate government, as do by-law changes. Other provinces (such as Alberta
Alberta
Alberta is a province of Canada. It had an estimated population of 3.7 million in 2010 making it the most populous of Canada's three prairie provinces...

) permit incorporation as of right, by the filing of Articles of Incorporation or Articles of Association.

During 2009, the federal government enacted new legislation repealing the Canada Corporations Act, Part II - the Canada Not-for-Profit Corporations Act. This Act is expected to be proclaimed in the autumn or winter of 2011. It allows for incorporation as of right, by Articles of Incorporation; does away with the ultra vires
Ultra vires
Ultra vires is a Latin phrase meaning literally "beyond the powers", although its standard legal translation and substitute is "beyond power". If an act requires legal authority and it is done with such authority, it is...

doctrine for nonprofits; establishes them as legal persons; and substantially updates the governance provisions for nonprofits. Ontario also overhauled its legislation, adopting the Ontario Not-for-Profit Corporations Act during 2010; pending the outcome of an anticipated election during October 2011, the new Act is expected to be proclaimed early during 2012.

Canada also permits a variety of charities (including public and private foundations). Charitable status is granted by the Canada Revenue Agency
Canada Revenue Agency
The Canada Revenue Agency is a federal agency that administers tax laws for the Government of Canada and for most provinces and territories, international trade legislation, and various social and economic benefit and incentive programs delivered through the tax system...

 (CRA) upon application by a nonprofit; charities are allowed to issue income tax receipts to donors, must spend a certain percentage of their assets (including cash, investments and fixed assets) and file annual reports in order to maintain their charitable status. In determining whether an organization can become a charity, CRA applies a common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

 test to its stated objects and activities. These must be:
  • The relief of poverty;
  • The advancement of education;
  • The advancement of religion; or
  • certain other purposes that benefit the community in a way the courts have said is charitable


Charities are not permitted to engage in political activity; doing so may result in the revocation of charitable status.

China

The Hong Kong Company Registry provides a memorandum of procedure for applying to Registrar of Companies for a Licence under Section 21 of the Companies Ordinance (Cap.32) for a limited company for the purpose of promoting commerce, art, science, religion, charity, or any other useful object.

Finland

In Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...

, "rekisteröity yhdistys", given the abbreviation ry
Ry (suffix)
In Finland, a ry is a suffix ending which generally denotes a registered, non-profit organization. In this instance, ry is an abbreviation for rekisteröity yhdistys, or "registered association", e.g. tAAt ry. Registration requires the organization to create legally sound constitution, which must...

, denotes a registered association. This is done at a cost of 75 Euro. The association is required by law to keep a list of members. It must also hold an AGM
Annual general meeting
An annual general meeting is a meeting that official bodies, and associations involving the public , are often required by law to hold...

 and at least 3 members are required to initiate it, a secretary, chairperson and treasurer being the usual format.

India

In India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, NPOs are known commonly as Non-Governmental Organizations (NGOs).

They can be registered in four ways:
  1. Trust
  2. Society
  3. Section-25 Company
  4. Special Licensing


Registration can be done with the Registrar of Companies(RoC).

The following laws or Constitutional Articles of the Republic of India are relevant to the NGOs:
  • Articles 19(1)(c) and 30 of the Constitution of India
  • Income Tax Act, 1961
  • Public Trusts Acts of various states
  • Societies Registration Act, 1860
  • Section 25 of the Indian Companies Act, 1956
  • Foreign Contribution (Regulation) Act, 1976

South Africa

In South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...

, charities issue a tax certificate when requested by donors which can be used as a tax deduction by the donor.

United Kingdom

In the UK, many nonprofit companies are incorporated as a company limited by guarantee
Company limited by guarantee
In British and Irish company law, a private company limited by guarantee is an alternative type of corporation used primarily for non-profit organisations that require legal personality. A guarantee company does not usually have a share capital or shareholders, but instead has members who act as...

. This means that the company does not have shares or shareholders, but it has the benefits of corporate status. This includes limited liability
Limited liability
Limited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its...

 for its members and being able to enter into contracts and purchase property in its own name. The goals ("objects") of the company are defined in the Memorandum of Association
Memorandum of Association
The memorandum of association of a company, often simply called the memorandum , is the document that governs the relationship between the company and the outside...

 when the company is formed. The profits of the company (also referred to as the trading surplus) must be invested in achieving these goals and not distributed to the company's members.

Since the Companies act 2006, nonprofit companies may be formed as a Community Interest Company
Community interest company
A community interest company is a new type of company introduced by the United Kingdom government in 2005 under the Companies Act 2004, designed for social enterprises that want to use their profits and assets for the public good...

 (CIC). These are forms of company limited by guarantee
Company limited by guarantee
In British and Irish company law, a private company limited by guarantee is an alternative type of corporation used primarily for non-profit organisations that require legal personality. A guarantee company does not usually have a share capital or shareholders, but instead has members who act as...

 or company limited by shares but with special conditions and are intended specifically to ensure that the profits and assets of the company are used for public good, even when managed for (limited) profit.

A charity is a nonprofit organisation that meets stricter criteria regarding its purpose and the method in which it makes decisions and reports its finances. For example, a charity is generally not allowed to pay its Trustees. In England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...

, charities may be registered with the Charity Commission
Charity Commission
The Charity Commission for England and Wales is the non-ministerial government department that regulates registered charities in England and Wales....

. In Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...

, the Office of the Scottish Charity Regulator
Office of the Scottish Charity Regulator
The Office of the Scottish Charity Regulator is a non-ministerial department of the Scottish Government, with responsibility for the regulation of charities in Scotland...

 serves the same function. Other organizations which are classified as nonprofit organizations elsewhere, such as trade unions, are subject to separate regulations, and are not regarded as "charities" in the technical sense.

United States

For a United States analysis of this issue, see 501(c) and United States Charitable Organization.


After a recognized type of legal entity has been formed at the state level, it is customary for the nonprofit organization to seek tax exempt status with respect to its income tax
Income tax in the United States
In the United States, a tax is imposed on income by the Federal, most states, and many local governments. The income tax is determined by applying a tax rate, which may increase as income increases, to taxable income as defined. Individuals and corporations are directly taxable, and estates and...

 obligations. That is done typically by applying to the Internal Revenue Service (IRS), although statutory exemptions exist for limited types of nonprofit organizations. The IRS, after reviewing the application to ensure the organization meets the conditions to be recognized as a tax exempt organization (such as the purpose, limitations on spending, and internal safeguards for a charity), may issue an authorization letter to the nonprofit granting it tax exempt status for income tax payment, filing, and deductibility purposes. The exemption does not apply to other Federal taxes such as employment taxes. Additionally, a tax-exempt organization must pay federal tax on income that is unrelated to their exempt purpose. Failure to maintain operations in conformity to the laws may result in an organization losing its tax exempt status.

Individual states and localities offer nonprofits exemptions from other taxes such as sales tax
Sales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....

 or property tax
Property tax
A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...

. Federal tax-exempt status does not guarantee exemption from state and local taxes, and vice versa. These exemptions generally have separate application processes and their requirements may differ from the IRS requirements. Furthermore, even a tax exempt organization may be required to file annual financial reports (IRS Form 990) at the state and federal level. A tax exempt organization's 990 forms are required to be made available for public scrutiny.

Belgium

By Belgian law, there are several kinds of nonprofit organisations:
  • Vereniging zonder winstoogmerk (Dutch
    Dutch language
    Dutch is a West Germanic language and the native language of the majority of the population of the Netherlands, Belgium, and Suriname, the three member states of the Dutch Language Union. Most speakers live in the European Union, where it is a first language for about 23 million and a second...

    , abbreviated vzw
    VZW
    VZW may refer to:*Verizon Wireless, a telecommunications company which uses VZW as an initialism*'vereniging zonder winstoogmerk', a Belgian legal designation...

    ) or Association sans but lucratif
    Association sans but lucratif
    ' or ' means 'non-profit organisation'. For international organisations, the equivalent is ivzw or aisbl...

    (French
    French language
    French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...

    , abbreviated asbl).
  • Internationale vereniging zonder winstoogmerk (Dutch
    Dutch language
    Dutch is a West Germanic language and the native language of the majority of the population of the Netherlands, Belgium, and Suriname, the three member states of the Dutch Language Union. Most speakers live in the European Union, where it is a first language for about 23 million and a second...

    , often abbreviated ivzw) or Association internationale sans but lucratif
    Association internationale sans but lucratif
    Internationale vereniging zonder winstoogmerk or Association internationale sans but lucratif is a form of corporation in Belgium. See Non-governmental organization....

    (French
    French language
    French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...

    ; often abbreviated aisbl) for international nonprofit organisations.
  • Stichting van openbaar nut (Dutch
    Dutch language
    Dutch is a West Germanic language and the native language of the majority of the population of the Netherlands, Belgium, and Suriname, the three member states of the Dutch Language Union. Most speakers live in the European Union, where it is a first language for about 23 million and a second...

    , abbreviated son) or Fondation d’utilités publique (French
    French language
    French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...

    , abbreviated fup).

These three kinds of nonprofit organisations are in contrast to a fourth:
  • Feitelijke vereniging (Dutch language
    Dutch language
    Dutch is a West Germanic language and the native language of the majority of the population of the Netherlands, Belgium, and Suriname, the three member states of the Dutch Language Union. Most speakers live in the European Union, where it is a first language for about 23 million and a second...

    ) or Association de fait (French language
    French language
    French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...

    ) an informal organization, often started for a short-term project, or managed alongside another NPO which does not have any status in law, so cannot purchase property etc.(association sans personnalité morale).

Japan

In Japan, an NPO is any citizen's group that serves the public interest and does not produce a profit for its members. NPOs are given corporate status to assist them in conducting business transactions. As of February 2011, there were 41,600 NPOs in Japan. Two hundred of NPOs were given tax-deductible status by the government which meant that only contributions to those organization were tax deductible for the contributors.

Problems experienced by NPOs

Capacity building
Capacity building
Capacity building also referred to as capacity development is a conceptual approach to development that focuses on understanding the obstacles that inhibit people, governments, international organizations and non-governmental organizations from realizing their developmental goals while enhancing...

 is an ongoing problem experienced by NPOs for a number of reasons. Most rely on external funding (government funds, grants from charitable foundations, direct donations) to maintain their operations and changes in these sources of revenue may influence the reliability or predictability with which the organization can hire and retain staff, sustain facilities, create programs, or maintain tax-exempt status. For example, a university that sells research to for-profit companies may have tax exemption problems. In addition, unreliable funding, long hours and low pay can result in employee retention problems. During 2009, the US government acknowledged this critical need by the inclusion of the Nonprofit Capacity Building Program in the Serve America Act. Further efforts to quantify the scope of the sector and propose policy solutions for community benefit were included in the Nonprofit Sector and Community Solutions Act, proposed during 2010.

Founder's syndrome
Founder's syndrome
Founder's syndrome, sometimes called Founderitis, is a label normally used to refer to a pattern of behavior on the part of the founder of an organization that, over time, becomes maladaptive to the successful accomplishment of the organizational mission. The term is anecdotal/unofficial and does...

 is an issue organizations face as they grow. Dynamic founders with a strong vision of how to operate the project try to retain control of the organization, even as new employees or volunteers want to expand the project's scope or change policy.

Resource mismanagement is a particular problem with NPOs because the employees are not accountable to anybody with a direct stake in the organization. For example, an employee may start a new program without disclosing its complete liabilities. The employee may be rewarded for improving the NPO's reputation, making other employees happy, and attracting new donors. Liabilities promised on the full faith and credit of the organization but not recorded anywhere constitute accounting fraud. But even indirect liabilities negatively affect the financial sustainability of the NPO, and the NPO will have financial problems unless strict controls are instated.

Examples

In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, two of the wealthiest nonprofit organizations are the Bill and Melinda Gates Foundation, which has an endowment of $38 billion, and the Howard Hughes Medical Institute
Howard Hughes Medical Institute
Howard Hughes Medical Institute is a United States non-profit medical research organization based in Chevy Chase, Maryland. It was founded by the American businessman Howard Hughes in 1953. It is one of the largest private funding organizations for biological and medical research in the United...

, which has an endowment of approximately $14.8 billion. Outside the United States, another large NPO is the British Wellcome Trust
Wellcome Trust
The Wellcome Trust was established in 1936 as an independent charity funding research to improve human and animal health. With an endowment of around £13.9 billion, it is the United Kingdom's largest non-governmental source of funds for biomedical research...

, which is a "charity" by British usage. See: List of wealthiest foundations. Note that this assessment excludes universities
University
A university is an institution of higher education and research, which grants academic degrees in a variety of subjects. A university is an organisation that provides both undergraduate education and postgraduate education...

, at least a few of which have assets in the tens of billions of dollars. For example; List of U.S. colleges and universities by endowment.

Measuring an NPO by its monetary size has obvious limitations, as the power and significance of NPOs are defined by more qualitative measurements such as effectiveness at performing charitable missions.

Some NPOs which are particularly well known, often for the charitable or social nature of their activities performed during a long period of time, include Amnesty International
Amnesty International
Amnesty International is an international non-governmental organisation whose stated mission is "to conduct research and generate action to prevent and end grave abuses of human rights, and to demand justice for those whose rights have been violated."Following a publication of Peter Benenson's...

, Oxfam
Oxfam
Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...

, Rotary International
Rotary International
Rotary International is an organization of service clubs known as Rotary Clubs located all over the world. The stated purpose of the organization is to bring together business and professional leaders to provide humanitarian service, encourage high ethical standards in all vocations, and help...

, Carnegie Corporation of New York
Carnegie Corporation of New York
Carnegie Corporation of New York, which was established by Andrew Carnegie in 1911 "to promote the advancement and diffusion of knowledge and understanding," is one of the oldest, largest and most influential of American foundations...

, DEMIRA Deutsche Minenräumer
DEMIRA Deutsche Minenräumer
DEMIRA, or Deutsche Minenräumer e. V. , is an international, humanitarian, non-governmental organization registered in Germany. DEMIRA was founded in 1996 in order to provide humanitarian mine clearance, EOD...

 (German Mine Clearers), FIDH International Federation for Human Rights
International Federation of Human Rights
The International Federation for Human Rights is a non-governmental federation for human rights organizations. Founded in 1922, FIDH is the oldest international human rights organisation worldwide and today brings together 164 member organisations in over 100 countries.FIDH is nonpartisan,...

, Goodwill Industries
Goodwill Industries
Goodwill Industries International is a not-for-profit organization that provides job training, employment placement services and other community-based programs for people who have a disability, lack education or job experience, or face employment challenges...

, United Way, The National Rifle Association
National Rifle Association
The National Rifle Association of America is an American non-profit 501 civil rights organization which advocates for the protection of the Second Amendment of the United States Bill of Rights and the promotion of firearm ownership rights as well as marksmanship, firearm safety, and the protection...

, ACORN
Association of Community Organizations for Reform Now
The Association of Community Organizations for Reform Now was a collection of community-based organizations in the United States that advocated for low- and moderate-income families by working on neighborhood safety, voter registration, health care, affordable housing, and other social issues...

 (now defunct), Habitat for Humanity, Family Promise
Family Promise
Family Promise is a pioneering non-profit organization dedicated to helping America's low-income families secure lasting independence. 163 Affiliates and 130,000 volunteers spanning 41 states provide annual assistance to over 45,000 citizens.- History :...

, Teach For America
Teach For America
Teach For America is an American non-profit organization that aims to eliminate educational inequity by enlisting the nation's most promising future leaders to teach for two or more years in low-income communities throughout the United States...

, the Red Cross and Red Crescent organizations, UNESCO
UNESCO
The United Nations Educational, Scientific and Cultural Organization is a specialized agency of the United Nations...

, IEEE, World Wide Fund for Nature
World Wide Fund for Nature
The World Wide Fund for Nature is an international non-governmental organization working on issues regarding the conservation, research and restoration of the environment, formerly named the World Wildlife Fund, which remains its official name in Canada and the United States...

, Heifer International
Heifer International
Heifer International is a global nonprofit with the goal of ending poverty and hunger in a sustainable fashion. Established in 1944, Heifer International gives out gifts of livestock, seeds and trees and extensive training to those in need...

, Translators Without Borders
Translators Without Borders
Translators without Borders, is a US non-profit association, which provides free translation services for humanitarian non-for-profit organizations...

 and SOS Children's Villages
SOS Children's Villages - USA
SOS Children’s Villages - USA is part of SOS Children's Villages, the largest orphan and abandoned children’s charity in the world. SOS Children's Villages - USA has been in operation since 1969 and has 501 tax exempt status...

.

However, there are also millions of smaller NPOs that provide social services and relief efforts to people throughout the world. There are more than 1.6 million NPOs in the United States alone.

There are also examples, for instance in Ireland of NGO umbrella organisations
Dóchas
Dóchas is the network of Non-Governmental Organisations involved in development and relief overseas and/or development education in Ireland...

 bringing about a degree of self-regulation in the NGO sector.

Internet

Many NPOs often use the .org
.org
The domain name org is a generic top-level domain of the Domain Name System used in the Internet. The name is derived from organization....

 or .us
.us
.us is the Internet country code top-level domain for the United States and was established in 1985. Registrants of .us domains must be United States citizens, residents, or organizations, or a foreign entity with a presence in the United States...

 (or the CCTLD of their respective country) or .edu
.edu
The domain name edu is a sponsored top-level domain in the Domain Name System of the Internet. The "domain is intended for accredited post-secondary educational U.S. institutions" and this intention is strictly enforced....

 top-level domain
Top-level domain
A top-level domain is one of the domains at the highest level in the hierarchical Domain Name System of the Internet. The top-level domain names are installed in the root zone of the name space. For all domains in lower levels, it is the last part of the domain name, that is, the last label of a...

 (TLD) when selecting a domain name
Domain name
A domain name is an identification string that defines a realm of administrative autonomy, authority, or control in the Internet. Domain names are formed by the rules and procedures of the Domain Name System ....

 to differentiate themselves from more commercial entities which typically use the .com
.com
The domain name com is a generic top-level domain in the Domain Name System of the Internet. Its name is derived from commercial, indicating its original intended purpose for domains registered by commercial organizations...

 space.

In the traditional domain noted in RFC 1591, .org is for "organizations that didn't fit anywhere else" in the naming system, which implies that it is the proper category for non-commercial organizations if they are not governmental, educational, or one of the other types with a specific TLD. It is not designated specifically for charitable organizations or any specific organizational or tax-law status, however; it encompasses anything that is not classifiable as another category. Currently, no restrictions are enforced on registration of .com or .org, so you can find organizations of all sorts in either of these domains, as well as other top-level domains including newer, more specific ones which may apply to particular sorts of organizations such as .museum
.museum
museum is a sponsored top-level domain in the Domain Name System of the Internet used exclusively by museums, museum associations, and individual members of the museum profession, as these groups are defined by the International Council of Museums .In joint action with the J...

 for museums or .coop
.coop
The domain coop is a sponsored top-level domain in the Domain Name System of the Internet. It is intended for the use of cooperatives, wholly owned subsidiaries, and other organizations that exist to promote or support co-operatives....

 for cooperative
Cooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...

s. Organizations might also register by the appropriate country code top-level domain
Country code top-level domain
A country code top-level domain is an Internet top-level domain generally used or reserved for a country, a sovereign state, or a dependent territory....

 for their country.

Other terminology for the sector

Instead of being defined by “non” words, some organizations are suggesting new, positive-sounding terminology to describe the sector. The term “civil society organization” (CSO) has been used by a growing number of organizations, such as the Center for the Study of Global Governance. The term “citizen sector organization” (CSO) has also been advocated to describe the sector — as one of citizens, for citizens — by organizations such as Ashoka: Innovators for the Public
Ashoka: Innovators for the Public
Ashoka: Innovators for the Public is a nonprofit organization based in Arlington, VA, supporting the field of social entrepreneurship. Ashoka was founded by Bill Drayton in 1981 to identify and support leading social entrepreneurs through a Social Venture Capital approach with the goal of...

. A more broadly-applicable term, "Social Benefit Organization" (SBO) has been advocated for by organizations such as MiniDonations. Advocates argue that these terms describe the sector in its own terms, without relying on terminology used for the government or business sectors. However, use of terminology by a nonprofit of self-descriptive language that is not legally compliant risks confusing the public about nonprofit abilities, capabilities and limitations.

Education


See also

  • Association without lucrative purpose
  • Community Organizations
    Community organization
    Community organizations are civil society non-profits that operate within a single local community. They are essentially a subset of the wider group of nonprofits. Like other nonprofits they are often run on a voluntary basis and are self funded...

  • Fundraising
    Fundraising
    Fundraising or fund raising is the process of soliciting and gathering voluntary contributions as money or other resources, by requesting donations from individuals, businesses, charitable foundations, or governmental agencies...

  • Master of Nonprofit Organizations
    Master of Nonprofit Organizations
    The Master of Nonprofit Organizations , Master of Nonprofit Management , Master of Not-for-Profit Leadership , Master of Nonprofit Studies , Master of Public Affairs , Master of Philanthropic Studies and similarly named degrees offer graduate-level training in management and leadership in the...

  • Mutual organization
    Mutual organization
    A mutual, mutual organization, or mutual society is an organization based on the principle of mutuality. Unlike a true cooperative, members usually do not contribute to the capital of the company by direct investment, but derive their right to profits and votes through their customer relationship...

  • Non-commercial
    Non-commercial
    Non-commercial refers to an activity or entity that does not in some sense involve commerce, at least relative to similar activities that do have a commercial objective or emphasis...

  • Non-governmental organization
    Non-governmental organization
    A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...

     (NGO)
  • Non-profit organizations and access to public information
    Non-profit organizations and access to public information
    When government agencies outsource basic services to third-party non-profit contractors, one consequence is that the public may lose its access to information about the service that the public would have retained, had a government agency carried out the service directly.A concern that previously...

  • Non-profit sector
  • Nonprofit technology
    Nonprofit technology
    Nonprofit technology comprises information and communication technologies that support the goals of nonprofit, nongovernmental, third sector, grassroots, and other mission-based organizations...

  • Occupational safety and health
    Occupational safety and health
    Occupational safety and health is a cross-disciplinary area concerned with protecting the safety, health and welfare of people engaged in work or employment. The goal of all occupational safety and health programs is to foster a safe work environment...

  • Social economy
    Social economy
    Social economy refers to a third sector in economies between the private sector and business or, the public sector and government. It includes organisations such as cooperatives, non-governmental organisations and charities....

  • Supporting organization (charity)
    Supporting organization (charity)
    A supporting organization, in the United States, is a public charity created by the U.S. Internal Revenue Code in . A supporting organization either makes grants to, or performs the operations of, a public charity similar to a private foundation...

  • United States of America non-profit laws
    United States of America non-profit laws
    United States of America non-profit laws relate to taxation, the special problems of an organization which does not have profit as its primary motivation, and prevention of charitable fraud. Some non-profit organizations can broadly be described as "charities" — like the American Red Cross...


:Category:Non-profit organizations

Further reading


External links

  • Non-Profits LibGuide resources from the University of Illinois at Urbana–Champaign Library
  • Our Community resources for the Australian non-profit sector
The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
x
OK