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A not-for-profit or non-for-profit organization (NFPO) is a
legal entity In law, a legal person is any person or legal entity that can do the things a human person is usually able to do in law – such as enter into contracts, lawsuit, sue and be sued, ownership, own property, and so on. The reason for the term "''le ...
that does not distribute surplus funds to its members and is formed to fulfill specific objectives. While not-for-profit organizations and
non-profit organizations A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...
(NPO) are distinct legal entities, the terms are sometimes used interchangeably. An NFPO must be differentiated from a NPO as they are not formed explicitly for the public good as an NPO must be, and NFPOs are considered "recreational organizations", meaning that they do not operate with the goal of generating revenue as opposed to NPOs.


Functions

An NFPO does not have the same obligation as an NPO to serve the public good, and as such it may be used to apply for
tax-exempt Tax exemption is the reduction or removal of a liability to make a compulsory payment that would otherwise be imposed by a ruling power upon persons, property, income, or transactions. Tax-exempt status may provide complete relief from taxes, redu ...
status as an organization that serves its members and does not have the goal of generating profit. An example of this is a
sports club A sports club or sporting club, sometimes an athletics club or sports society or sports association, is a group of people formed for the purpose of playing sports. Sports clubs range from organisations whose members play together, unpaid, and ...
, which exists for the enjoyment of its members and thus would function well as an NFPO, with revenue being re-invested into improving the organization. These organizations typically file for tax exemption in the United States under section 501(c)(7) of the
Internal Revenue Code The Internal Revenue Code of 1986 (IRC), is the domestic portion of federal statutory tax law in the United States. It is codified in statute as Title 26 of the United States Code. The IRC is organized topically into subtitles and sections, co ...
as social clubs. Common ventures for which NFPOs are established include: * Charities * Sports clubs * Foundations * Private schools * Universities * Museums * Churches * Social welfare organizations Charities, as NFPOs, function under the premise that any revenue generated should be used to further their charitable missions rather than distribute profits among members. This revenue might come from donations, fundraising, or other activities undertaken to support their charitable cause.


See also

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501(c) organization A 501(c) organization is a nonprofit organization in the Law of the United States#Federal law, federal law of the United States according to Internal Revenue Code (26 U.S.C. § 501(c)). Such organizations are exempt from some Taxation in the Un ...
*
Community organization Community organization or community based organization refers to organization aimed at making desired improvements to a community's social health, well-being, and overall functioning. Community organization occurs in geographically, psychosocially ...
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Fundraising Fundraising or fund-raising is the process of seeking and gathering voluntary financial contributions by engaging individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gathe ...
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Nonprofit organization A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...
*
Mutual organization A mutual organization, also mutual society or simply mutual, is an organization (which is often, but not always, a company or business) based on the principle of mutuality and governed by private law. Unlike a cooperative, members usually do not ...
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Non-commercial activity A non-commercial (also spelled noncommercial) activity is an activity that is not carried out in the interest of profit. The opposite is commercial, something that primarily serves profit interests and is focused on business. For example, advertis ...
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Non-governmental organization A non-governmental organization (NGO) is an independent, typically nonprofit organization that operates outside government control, though it may get a significant percentage of its funding from government or corporate sources. NGOs often focus ...
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Nonprofit organization laws by jurisdiction Laws regulating nonprofit organizations, nonprofit corporations, non-governmental organizations, and voluntary associations vary in different jurisdictions. They all play a critical role in addressing social, economic, and environmental issues. Th ...
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Non-profit organizations and access to public information When government agencies outsource basic services to third-party non-profit contractors, one consequence is that the public may lose its access to information about the service that the public would have retained, had a government agency carried o ...
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Non-profit technology Nonprofit technology is the deliberative use of technology by nonprofit organizations to maximize potential in numerous areas, primarily in supporting the organization mission and meeting reporting requirements to funders and regulators. Types of ...
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Public-benefit nonprofit corporation A public-benefit nonprofit corporationnonprofit A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity orga ...
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Supporting organization (charity) A supporting organization, in the United States, is a public charity that operates under the United States, U.S. Internal Revenue Code i26 USCA 509(a)(3) A supporting organization either makes grants to, or performs the operations of, a public cha ...
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United States non-profit laws United States non-profit laws relate to taxation, the special problems of an organization which does not have profit as its primary motivation, and prevention of charitable fraud. Some non-profit organizations can broadly be described as "charitie ...
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Voluntary sector In relation to public services, the voluntary sector is the realm of social activity undertaken by non-governmental, not for profit organizations. This sector is also called the third sector (in contrast to the public sector and the private sec ...


References

{{Reflist Types of organization