non-profit organization (abbreviated as NPO, also known as a not-for-profit
organization[1]) is an organization that does not distribute its surplus funds
to owners or shareholders, but instead uses them to help pursue its goals.[2]
Examples of NPOs include charities (i.e. charitable organizations), trade
unions, and public arts organizations. Most governments and government agencies
meet this definition, but in most countries they are considered a separate type
of organization and not counted as NPOs. They are in most countries exempt from
income and property taxation.
Whereas for-profit organizations exist to earn and re-distribute taxable wealth
to employees and shareholders, the nonprofit corporation exists solely to
provide programs and services that are of self-benefit. Often these programs,
services and policies are overlooked and not otherwise executed or enforced by
the government. While they are able to earn a profit, more accurately called a
surplus, such earnings must be retained by the organization for its
self-preservation, expansion and future plans. Earnings may not benefit
individuals or stake-holders.[3] While some nonprofit organizations put
substantial funds into hiring and rewarding their internal corporate leadership,
middle-management personnel and workers, others employ unpaid volunteers and
even executives may work for no compensation. However, since the late 1980s
there has been a growing consensus that nonprofits can achieve their corporate
targets more effectively by using some of the same methods developed in
for-profit enterprises. These include effective internal management, ensuring
accountability for results, and monitoring the performance of different
divisions or projects in order to better benefit from their capital and workers.
Those require satisfied management and that, in turn, begins with the
organization's mission.[4].