Not-for-profit organizations are businesses or organizations whose main goal is to support or fulfill a public or private mission. Essentially, these entities are structured with the purpose of advancing a cause rather than generating a profit for owners or shareholders. The funds generated by not-for-profits are used to support the cause they are designed to work towards, rather than profit sharing or providing returns to shareholders.

Given their nonprofit designation, these organizations can accept donations and government grants that their for-profit counterparts cannot. Additionally, many not-for-profits are exempt from taxes, such as income or property taxes. That can help them accumulate funds more quickly and do more with those funds.

All funds generated by a not-for-profit organization must be used for the purpose of achieving its stated objectives and paying necessary operational costs. No portion of the funds can go to the members, directors, or officers of the organization. This is monitored closely by the state agency responsible for overseeing charitable organizations and all not-for-profit organizations must maintain compliance with the regulations in their state.

The business tactics and management techniques used by not-for-profits are often similar to for-profit entities. However, the money made from their activities is funneled directly into achieving their mission and the organization. In recent years, not-for-profits have become increasingly competitive in tackling today’s most pressing issues because they are able to work on multiple fronts with more efficacy than many one-person operations.

By and large, not-for-profit organizations are dedicated to serving mankind. Many of these organizations have limited staff, few resources and thus, limited abilities within the marketplace. As such, they heavily rely on donations, grants, and volunteer support to keep their operations running. Donations to not-for-profits are tax deductible and many offer donor rewards that help build a sense of community; creating a sense of ownership among those who keep the organization active.

In essence, not-for-profit organizations provide a tremendous public service. By utilizing grants, donations, and other financial resources, these entities are able to achieve a mission and make a profound impact on their communities. Without not-for-profits, these essential services would not be available to those in need.