Difference Between Not for Profit and Non-Profit Organizations

There are many companies which conduct business without the purpose of gaining a profit for the owners or shareholders. Instead, those companies wish to take the income and utilize it to reach the companies’ goals in the local community or on a global level. Both non-profits and not-for-profits use the income of the organization to assist those that need it. For example, non-profits may use the income to feed the homeless or build homes for those that have lost their home to a natural disaster such as flooding, hurricanes or fires.

However, there are some differences in those types of companies which do not profit. The main defense in not-for-profit vs. non-profit is the manner in which the organizations exists. Although the two terms are often used interchangeably, the distinction in not-for-profit vs. non-profit could be in its membership.

Non-profits may have employees that get paid a salary, but that salary is not contingent on the fundraising efforts of that company. There may also be volunteers at the non-profit, but they fail to benefit from the income of the company.

However, not-for-profit organizations may include a membership roster which does directly benefit from the income of the organization. For example, an organization that has fund drives to send children to a destination would likely be a not-for-profit if the children were the ones that took part in the fundraising efforts, such as selling candy to raise funds.

NEXT: Finding a List of Non-Profit Organizations