What Is the Difference Between Non-Profit and Not-for-Profit

If you read both the names ‘Non-Profit’ and ‘Not for profit’, you might be wondering what the difference is. They both convey a similar meaning, isn’t it? But here’s the catch. They convey similar meanings, but not the same. For those people new to this field, it is important to know the difference between a non-profit and a not-for-profit organization. There are a lot of legalities and technicalities that go into the making of both these terms and hence there’s a difference in the meaning of both the terms. However, many a times, both these words are used interchangeably with one another, making both of them in common use.

Many people feel that ‘not-for-profit’ organization refers to those groups which operate with the intent of not making a profit at all, in the sense that all that they earn is put back into the company for its main purpose. By this description, a not-for-profit will include non government organizations, charity etc. Here, an attempt is made to convey the message that whatever money is being given to the company is not being used by the employees as profits but rather is used for the purpose for which the company has been set up. Once the confidence of the donor is won, then getting money for the cause becomes really easy.

Many people have an alternate description regarding not-for-profit which encompasses institutions such as even professional companies, social clubs etc. These organizations might be a little logical to include under the name ‘not-for-profit’ but the absence of a proper definition makes it very tough to explain in real life.

Even though the federal and state legal statures actually affirm that ‘not-for-profit’ and ‘non-profit’ are synonyms for each other, the Infernal Revenue Services does provide guidelines for deciding the meaning of both the similar terms. Non-profits refer to organizations created with the sole intent of meeting its basic and main role. Also, it does not include everything that’s charitable. Also, those who are experienced in the field of fundraising  generally prefer a not-for-profit organization because there is a clear message involved in the communication that all the money received will be used for the next venture on a totally not for profit basis. No individual gets profit out of such ventures and hence, fundraisers are willing and ready to support not-for-profit.

One more issue revolving around non-profit is the use of a hyphen. Whether or not is should be used is still a debate. Experts want non-profit to become one word, without the use of a hyphen where as others are still considering what should be done.

admin