How are faith based and non-profit organizations different from for-profit organizations?
Rose Ann asked:
How are faith based and non-profit organizations different from for-profit
organizations, such as a corporation? In what sense are these organizations
similar to each other?
Caffeinated Content – Members-Only Content for WordPress
Difference is all donations go toward their intended cause. A for profit company sole intent is to earn money
Caffeinated Content
A nonprofit organization is a mission-based organization. Similarities to for-profits include that they employ staff, have human resources systems and accounting systems, and want to make enough money to cover all expenses, including salaries, and fund all activities. The difference is that for-profits make their money at least some of their money through income generation activities (selling goods and services). For-profits can also make money through having services contracted (government agencies and even nonprofit organizations sometimes hire for-profit companies to perform certain services). Nonprofits can also make money from selling products and services or contracts from other organizations to provide certain services, but they also make their money from donations.
When a for-profit makes a profit (more money than it needs to cover expenses), the profits are distributed among share holders and sometimes even staff. When a nonprofit makes a profit, the money cannot be given to staff or the board of directors as profit-sharing — it has to go back into the organization to pay for expenses.