A not-for-profit or non-for-profit organization (NFPO) is a legal entity that does not distribute surplus funds to its members and is formed to fulfill specific objectives.[1] An NFPO does not earn profit for its owners, as any revenue generated by its activities must be put back into the organization.[2]
While not-for-profit organizations and non-profit organizations (NPO) are distinct legal entities, the terms are sometimes used interchangeably.[3] An NFPO must be differentiated from a NPO as they are not formed explicitly for the public good as an NPO must be, and NFPOs are considered "recreational organizations", meaning that they do not operate with the goal of generating revenue as opposed to NPOs.[1]
Functionsedit
An NFPO does not have the same obligation as an NPO to serve the public good, and as such it may be used to apply for tax-exempt status as an organization that serves its members and does not have the goal of generating profit.[4] An example of this is a sports club, which exists for the enjoyment of its members and thus would function well as an NFPO, with revenue being re-invested into improving the organization.[1]
These organizations typically file for tax exemption in the United States under section 501(c)(7) of the Internal Revenue Code as social clubs.[5] Common ventures for which NFPOs are established include:
Charities
Sports clubs
Foundations
Private schools
Universities
Museums
Churches
Social welfare organizations
Charities, as NFPOs, function under the premise that any revenue generated should be used to further their charitable missions rather than distribute profits among members. This revenue might come from donations, fundraising, or other activities undertaken to support their charitable cause.
^ abcHeaslip, Emily (30 March 2020). "Nonprofit, Not-for Profit & For-Profit Organizations Explained". uschamber.com. from the original on 14 February 2023. Retrieved 14 February 2023.
^Associates, Ashcroft & (24 September 2015). "Differences Between Nonprofit and Not For Profit". Ashcroft & Associates. from the original on 8 March 2023. Retrieved 14 February 2023.
^Davis, Kylie. "Nonprofit vs. not-for-profit: How to tell them apart". Givebutter. from the original on 14 February 2023. Retrieved 14 February 2023.
^Lake, Rebecca (8 February 2023). "Non-Profit vs. Not-for-Profit: What's the Difference?". smartasset. from the original on 14 February 2023. Retrieved 14 February 2023.
^"Social Clubs". Internal Revenue Service. from the original on 30 November 2022. Retrieved 14 February 2023.
February 16, 2024
profit, organization, confused, with, nonprofit, organization, governmental, organization, charitable, organization, examples, perspective, this, article, represent, worldwide, view, subject, improve, this, article, discuss, issue, talk, page, create, article,. Not to be confused with Nonprofit organization Non governmental organization or Charitable organization The examples and perspective in this article may not represent a worldwide view of the subject You may improve this article discuss the issue on the talk page or create a new article as appropriate November 2023 Learn how and when to remove this template message A not for profit or non for profit organization NFPO is a legal entity that does not distribute surplus funds to its members and is formed to fulfill specific objectives 1 An NFPO does not earn profit for its owners as any revenue generated by its activities must be put back into the organization 2 While not for profit organizations and non profit organizations NPO are distinct legal entities the terms are sometimes used interchangeably 3 An NFPO must be differentiated from a NPO as they are not formed explicitly for the public good as an NPO must be and NFPOs are considered recreational organizations meaning that they do not operate with the goal of generating revenue as opposed to NPOs 1 Functions editAn NFPO does not have the same obligation as an NPO to serve the public good and as such it may be used to apply for tax exempt status as an organization that serves its members and does not have the goal of generating profit 4 An example of this is a sports club which exists for the enjoyment of its members and thus would function well as an NFPO with revenue being re invested into improving the organization 1 These organizations typically file for tax exemption in the United States under section 501 c 7 of the Internal Revenue Code as social clubs 5 Common ventures for which NFPOs are established include Charities Sports clubs Foundations Private schools Universities Museums Churches Social welfare organizationsCharities as NFPOs function under the premise that any revenue generated should be used to further their charitable missions rather than distribute profits among members This revenue might come from donations fundraising or other activities undertaken to support their charitable cause See also edit501 c organization Community organization Fundraising Nonprofit organization Mutual organization Non commercial activity Non governmental organization Nonprofit organization laws by jurisdiction Non profit organizations and access to public information Non profit technology Public benefit nonprofit corporation Supporting organization charity United States non profit laws Voluntary sectorReferences edit a b c Heaslip Emily 30 March 2020 Nonprofit Not for Profit amp For Profit Organizations Explained uschamber com Archived from the original on 14 February 2023 Retrieved 14 February 2023 Associates Ashcroft amp 24 September 2015 Differences Between Nonprofit and Not For Profit Ashcroft amp Associates Archived from the original on 8 March 2023 Retrieved 14 February 2023 Davis Kylie Nonprofit vs not for profit How to tell them apart Givebutter Archived from the original on 14 February 2023 Retrieved 14 February 2023 Lake Rebecca 8 February 2023 Non Profit vs Not for Profit What s the Difference smartasset Archived from the original on 14 February 2023 Retrieved 14 February 2023 Social Clubs Internal Revenue Service Archived from the original on 30 November 2022 Retrieved 14 February 2023 Retrieved from https en wikipedia org w index php title Not for profit organization amp oldid 1195692491, wikipedia, wiki, book, books, library,
