nonprofit

A nonprofit organization is an entity organized for purposes other than making a profit for owners or shareholders. It uses any surplus revenues to further its mission and public benefit activities rather than distributing profits to private individuals. Nonprofits encompass a broad range of organizations, including charities, foundations, educational institutions, religious groups, and cultural or scientific associations. They are typically formed to serve the public or a specific community interest and often seek broad public support.

Legal status and governance vary by country but share common features. Nonprofits usually operate under a formal organizational structure with a board of directors or trustees responsible for fiduciary oversight, compliance, and strategic direction. Ownership is not privately held, and assets are dedicated to the mission; upon dissolution, remaining assets are generally allocated to other nonprofit or public-benefit entities. In many jurisdictions, nonprofits can qualify for tax exemptions and eligibility for tax-deductible donations, subject to compliance with applicable rules. In the United States, for example, many charitable organizations pursue tax exemption under section 501(c)(3) of the Internal Revenue Code and face restrictions on political activities and private benefit.

Funding and activities are mission-driven. Revenue may come from donations, grants, government funding, membership dues, program fees, and fundraising events. Expenditures are reinvested in programs, administration, and development rather than distributed as profits. Common areas of work include relief and social services, education and research, religion, arts and culture, and environmental or public-interest advocacy. Nonprofits often rely on volunteers and collaborate with other organizations to maximize impact.

Critics point to funding volatility, governance challenges, and questions about efficiency or overhead. Proponents emphasize accountability, social impact, and the role of nonprofits in addressing needs not fully met by markets or government.