A non-profit organization (often called "non-profit org" or simply "non-profit" or "not-for-profit") can be seen as an organization that doesn't have a primary purpose to make a profit. It may be entirely funded by voluntary donations. The term is widely used in the United States, where, as in many other countries, charity is only applied to certain types of non-profit organization. In other countries, non-profits are often called simply "charities", or, more commonly, "non-governmental organizations" (NGO's).
Structure
In the U.S. a non-profit organization is usually a corporation formed in one of the 50 states as a non-profit. Most non-profits do not have members, although they may. The non-profit may also be a trust or association of members. The organization may be controlled by its members who elect the Board of Directors or Board of Trustees. Not-for-profit organizations may have a delegate structure to allow for the representation of groups or corporations as members. Alternately, it may be a non-membership organization and the board of directors may elect its own successors.
Status
In the U.S a non-profit organization may have a tax exempt status or it may be a de-facto group of individuals operating for a common purpose. For example, it may comprise a voluntary group of individuals who are dedicated to developing an open content online encyclopedia, that allows any member of the public who has access to an internet connection and a world wide web browser to make a contribution of knowledge, information, editing, formatting, or programming skills. More commonly, though, the organization applies for tax exempt status through the Internal Revenue Service (IRS)
Goals
Such "organizations" are often charities or service organizations; they may be organized as a not-for-profit corporation or as a trust, a cooperative or they may be purely informal. Sometimes they are also called foundations, or endowments that have large equity funds . Most foundations give out grants to other not-for-profit organizations, or fellowships to individuals. However, the name foundation may be used by any not-for-profit corporation -- even volunteer organizations or grass roots groups. A non-profit organization may be a very loosely organized group such as a block association , or a trade union, or it may be a complex structure such as a university, hospital, documentary film production company or educational book publisher.
Laws
Most states and federal governments have laws governing the setting up, running, and reporting requirements of these organizations. In many aspects they are similar to business entities though there are often significant differences. Both non-profit and for-profit entities must have board members, steering committee members, or trustees who owe the organization a fiduciary duty of loyalty and trust.
Examples
The largest non-profit organization in the United States is the Bill and Melinda Gates Foundation, which has an endowment of approximately $27 billion. The second-largest is the Howard Hughes Medical Institute, which has an endowment of approximately $11 billion. The largest organisation of this kind in the rest of the world is probably the British Wellcome Trust, though it is a "charity" in British usage, not a "non-profit.
Laws on non-profit organizations
- Commonwealth non-profit laws
- European Union non-profit laws
- People's Republic of China non-profit laws
- Republic of India non-profit laws
- Republic of Japan non-profit laws
- Russian Federation non-profit laws
- United States of America non-profit laws
United Kingdom
In the United Kingdom non-profit organizations are rarely considered as a single class of entity. All philanthropic organizations have to be registered with the Charity Commission and they are referred to as charities, not as non-profits. Other groups which are classified as non-profit organizations in the U.S., such as trade unions, are subject to separate regulations, and are not conflated with charities in British usage.
Examples of non-profit organizations
Many non-profit organizations use the .org top-level domain when selecting a domain, though this is in no sense a requirement, legal or otherwise.
See also
