Non-profit Organisations

Non-profit Organisations

A nonprofit organization (US and UK), or not-for-profit organization (UK and others), often called an NPO or simply a nonprofit and non-commercial organization (Russia and CIS), often called an NCO, is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends. States in the United States defer to the IRS designation conferred under United States Internal Revenue Code Section 501(c), when the IRS deems an organization eligible.

While not-for-profit organizations are permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans. NPOs have controlling members or boards. Many have paid staff including management, while others employ unpaid volunteers and even executives who work with or without compensation (occasionally nominal). Where there is a token fee, in general, it is used to meet legal requirements for establishing a contract between the executive and the organization.

Designation as a nonprofit and an intent to make money are not related in the United States. This means nothing can be inferred by the declaration. It is unclear whether or not this holds outside of the U.S. In the United States, such inference is the purpose of the Internal Revenue Code, Section 501(c). The extent to which an NPO can generate surplus revenues may be constrained or use of surplus revenues may be restricted.

Read more about Non-profit Organisations:  Nature and Goals, Legal Aspects, Problems Experienced By NPOs, Examples, Internet, Other Terminology For The Sector, See Also