Another in a series of articles related to association management selected from our reading list by:
Robert O. Patterson, JD
CEO/ Principal
The Center for Association Resources, Inc.
The running of Non Profit Organizations
The term trading means the exchange of goods and services with a view of making profits. The sole trader concern, partnership business and all other forms of organizations commence business with the view of profit making or wealth making. So they are known as trading concerns and apart from this there are some institutions like hospitals, educational institutions, cooperative societies, trade unions, trade associations, public art organization etc. which are non trading organization. These sort of nonprofit making organizations are established with a view of providing services and not with the object of profit making. An organization that does not distribute its surplus funds to its owners or shareholders is called NPO or nonprofit making organization. These organizations make use of the surplus to pursue its goals. The definition of the nonprofit making organizations remains the same though with slight variations. The advantage that this sort of organization enjoys over other organizations is that they are exempt from income and property taxation.
Now the question arises, who owns these sorts of organizations? The basic difference arises from the mode of ownership itself. The profit making organizations may be owned privately or by shareholders etc but in the case of the nonprofit making organizations the ownership is entrusted in the controlling members or with the boards. So these sorts of organizations are wholly managed and run by the so called members or the boards. The nonprofit making organization also makes surplus, these surpluses are retained by the organization and is used for self-preservation, expansions and developments. These organizations are also like the profit making organization in the mode of operation as they also keep an eye on the management, performance, accountability and transparency of the organization.
Apart from the profit making organization, nonprofit making organizations often take up the form of charities or service organizations. They may be setup as a nonprofit corporation or as a trust or as a cooperative. They are also called as foundations or endowments. The name foundations can be tagged to nonprofit corporation or volunteer organizations or grass roots groups.
Their appearance and name in the internet is also different. These sites don’t use the common domain name of .com but instead they make use of domain names like .org, .edu, .museum or .corp. The formation of this sort of organization differs from country to country. In each and every country they have their own rules and regulations governing the nonprofit making organization.
There are a large number of nonprofit making organizations aiming at the social welfare of the society. The best example of a nonprofit making organization is the Bill and Melinda Gates Foundation in the US.
Npo,Non Profit making organisation, foundation, trusts, society,The Center for Association Resources
