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What is a non-profit organization?

by Ritvik
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Non-profit organizations serve the public interest or common interest. Becoming a non-profit organization does not mean that the organization will not generate profits, but only means that it will not generate revenue. They are usually used for scientific, religious, educational or charitable purposes, and are tax-exempt under IRS approval.

Non-profit organizations can take any form, including soup kitchens, local churches, homeless shelters, labor unions, museums, universities, and hospitals.

Regardless of its size or form, non-profit organizations have five characteristics.

  1. Private organizations separated from the government
  2. Be organized
  3. Voluntary
  4. Autonomy
  5. Do not allocate profits to anything other than organizational development.
non-profit organization

What do non-profit organizations do?

Non-profit organizations allow people to come together and join resources to achieve goals that are conducive to organizational goals. In this way, the revenue generated by non-profit organizations will be used to improve the tasks they want to complete.

Non-profit organizations are usually organized in response to social issues facing the community and focus on other needs that must be met. Then, action is taken by implementing a plan within the organization, which is managed by volunteers.

When volunteering for the cause, many goals were set for the success of the cause.

There are several characteristics that non-profit organizations must achieve in carrying out their mission to increase their chances of success. One of such characteristics is scalability.

When the goal is measurable, it is easier for non-profit organizations to determine whether they have reached the goal. For example, “helping 300 homeless people find stable and affordable housing in the next year” will be a measurable goal, where success depends on the number of people getting help within a certain period of time.

The beneficiaries of the actions of non-profit organizations should also be included in the goals. In the example above, it is clear that the beneficiaries will be homeless people, so it is clear that they will be those who benefit from the efforts of non-profit organizations.

What are the functions of non-profit organizations?

The functions of non-profit organizations depend on the goals of the organization. Non-profit organizations usually generate revenue and/or popularity for a specific purpose or mission.

These are the three possible functions of non-profit organizations:

Charity or social welfare

Charity and social welfare are designed to provide assistance and relief to people who cannot obtain such necessities. It is worth noting that because these organizations are tax-exempt for the help they provide, they actually save the government money. An example is the Women’s Refuge, where women and children can seek asylum in situations of abuse. This organization provides direct relief and asylum to those in need.

Religious function

Religious functions usually aim to share a certain belief and act in the name of said belief. Some religious organizations meet the needs of their people through existing organizations or establish new independent non-profit organizations to provide charitable services to their communities.

Trade, research and education

Trade organizations seek to further benefit the goals of specific professional groups by establishing associations including but not limited to teachers, nurses and engineers. The function of these groups is to train group members and provide opportunities for communication.

Research and education non-profit organizations seek to improve the conditions of people around them through advances in research and education. However, not all research organizations are non-profit organizations, because some research organizations are sponsored by different companies. Educational organizations may recruit new teachers to educate students where they are most needed, such as in rural school districts.


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