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Non Profit Organizations

A nonprofit organization is an organization which is formed for purposes other than for purposes other than generating profit. Its primary objective is to support some issue or matter of private interest or public concern for non-commercial purposes. Nonprofits may be involved in an innumerable range of areas relating to the arts, charities, education, politics, religion, research, or some other endeavor.

These organizations are governed by laws which are country specific. Nonprofit organizations generally do not operate to generate profit, a characteristic widely considered to be the defining characteristic of such organizations. However, a nonprofit organization may accept, hold and disburse money and other things of value

Both nonprofit and for-profit entities must have board members, steering committee members, or trustees who owe the organization a fiduciary duty of loyalty and trust. In the United States, nonprofit organizations normally are formed by incorporating in the state in which they expect to do business.

It may also be a trust or association of members or 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.

However, a primary difference between a nonprofit and a for-profit corporation is that a nonprofit does not issue stock or pay dividends, (for example, The Code of the Commonwealth of Virginia includes the Non-Stock Corporation Act that is used to incorporate nonprofit entities) and may not enrich its directors. Although like for-profit corporations, nonprofits may still have employees and can compensate their directors within reasonable bounds.

Among the major examples for non profit organizations are the Bill and Melinda Gates Foundation, Howard Hughes Medical Institute and others.



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