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    Nonprofit organization | Definition, Types & Benefits | …

    nonprofit organization, an organization, typically dedicated to pursuing mission-oriented goals through the collective actions of citizens, that is not formed and organized so as to generate a profit.

    In the United States a nonprofit organization is legally delineated from firms in the for-profit sector by its tax-exempt status. Outside the United States, the legal framework defining the government, business, and nonprofit sec…

    nonprofit organization, an organization, typically dedicated to pursuing mission-oriented goals through the collective actions of citizens, that is not formed and organized so as to generate a profit.

    In the United States a nonprofit organization is legally delineated from firms in the for-profit sector by its tax-exempt status. Outside the United States, the legal framework defining the government, business, and nonprofit sectors can be less distinct, depending on the country. International nonprofit organizations are often referred to as nongovernmental organizations, although that term may also include for-profit entities. Nonprofit organizations participate in a large array of activities, from education to poverty relief and music to political advocacy. They grew tremendously in number and in resources throughout the world in the latter half of the 20th century. The term third sector has also been used to describe nonprofit and nongovernmental organizations.

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    The nonprofit sector provides many opportunities for civic participation. Examples range from groups centred on a pastime, such as a local choral group, to advocacy organizations centred on health, environmental, or other policy issues. Demographic groups that are disenfranchised, such as ethnic minorities, can form nonprofit organizations and develop a collective voice in the polity that is stronger than their voice in traditional representative governments. Individuals can develop leadership skills within the realm of the nonprofit sector and then transition to active participation in decision making in their community. Public participation in nonprofit organizations is limited in some organizations where funding is largely from commercial sources (for example, hospitals). Other organizations involve the public mainly through payment of an annual membership fee. In contrast, many nonprofit organizations depend heavily on volunteer labour and extensive involvement of community members to carry out mission-related programs.

    Despite creating opportunities for enhanced civic participation, a strong nonprofit sector can dilute the mandate of the voting public in several ways. First, nonprofit organizations are run not by elected officials but by community members who have the time and wherewithal to devote themselves to the cause—which often means the community elite. Second, as government age…

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    Decision making in nonprofit organizations may be complex because of the multitude of stakeholders involved in organizations. A board of directors convenes at regular intervals to review the finances of the organization and to provide administrative guidance for the organization’s staff. In smaller organizations, the administrative role of director...

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    Since colonial days in the United States, citizens have actively participated in voluntary associations, and the roots of the American nonprofit sector extend back to that preference for association outside the purview of the government. Colonial leaders expressed distrust of the potential power of voluntary association leaders to sway public opinion. Distrust of nonprofit organizations has surfaced repeatedly throughout history as lawmakers sought to limit political advocacy and other activities of foundations and other nonprofit organizations. On the other hand, governments have turned to nonprofit organizations, especially since the 1980s, to deliver a vast array of public services that were once provided by public agencies.

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    Nongovernmental organizations have expanded in influence worldwide. Particularly in developing nations, nongovernmental organizations have developed their capacity since the 1990s to work in partnership with home governments to alleviate poverty and other pressing problems. International human rights organizations have also gained stature—for example, working w…

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