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What are not-for-profits?


In contrast to an entity that operates as a business to make a profit for its owners, a nonprofit organization (NPO), also referred to as a non-business entity, not-for-profit organization, or nonprofit institution is a legal entity organized and run by a collective, public, or social benefit.

The non-distribution constraint applies to nonprofits, which means that any surplus funds must be used to further their mission rather than being distributed to other parties.

Many organizations, including some political ones, educational institutions, professional associations, religious institutions, social clubs, and consumer cooperatives, are nonprofit.

Government approval is required for nonprofit organizations to be tax-exempt, however, some may also be eligible for tax-deductible donations.

However, an organization can incorporate as a nonprofit organization even if it does not have tax-exempt status.

To learn more about not-for-profits, refer to:

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