Non-Profit

A nonprofit organization (NPO), also known as a non-business entity, not-for-profit organization, or nonprofit institution, is an organization dedicated to furthering a particular social cause or advocating for a shared point of view. In economic terms, it is an organization using its surplus of the revenues to further achieve its ultimate objective, rather than distributing its income to the organization's shareholders, leaders, or members.

Non-profits are tax-exempt or charitable, meaning they do not pay income tax on the money that they receive for their organization. They can operate in religious, scientific, research, or educational settings.

The key aspects of nonprofits are accountability, trustworthiness, honesty, and openness to every person who has invested time, money, and faith into the organization. Non-profit organizations are accountable to the donors, founders, volunteers, program recipients, and the public community. Public confidence is a factor in the amount of money that a non-profit organization is able to raise. The more non-profits focus on their mission, the more public confidence they will have, and as a result, more money for the organization. The activities a nonprofit is partaking in can help build the public’s confidence in non-profits, as well as how ethical the standards and practices are.

Profit, in accounting, is an income distributed to the owner in a profitable market production process (business). Profit is a measure of profitability, which is the owner’s major interest in the income-formation process of market production. There are several profit measures in common use.

Income formation in market production is always a balance between income generation and income distribution. The income generated is always distributed to the stakeholders of production as economic value within the review period. The profit is the share of income formation the owner is able to keep to himself/herself in the income distribution process. Profit is one of the major sources of economic well being because it means incomes and opportunities to develop production. The words “income”, “profit” and “earnings” are synonyms in this context.

I understand organizations like churches, services like the Red Cross or police or fire, or schools being NPOs, but how do workers get raises? How is new equipment purchased? Sure the tax breaks are good but if the plumbing needs to be replaced or a leak in the roof appears, where are the funds to pay for it?

Some governmental subsidies help communities out but after that it turns into begging. What if the community does not chip in?

A ‘for-profit’ at least suggest to investors that they will be rewarded with dividends at the end of the year. Their mission may be of the best intensions but the bottom-line is to make more money than you spend. Operations are run with an eye on cost saving measures but the outlook is for expansion and increased income.

Some ‘for-profit’ reward their leaders with bonuses and stock options in good years. Workers get raises to maintain the workforce and entice new recruitment. Annual reports show profit trends and predictions for better days ahead to sell more stocks.

So why are there all these NPOs doing all the work?

When there is a disaster or an emergency, the NPOs are the first responders. The NPOs distribute food, water, set up cots and tents. The NPOs offer medical relief and humanity to those in crisis.

Where is the government? Isn’t the government what we pay taxes to for such situations?

Is the government the biggest Non-Profit of them all?

The government is always finding more ways to spend our taxes and expand staff and buildings but there never seems to be enough money to go around. The government provides taxpayer subsidies to private ‘For-Profit’ contractors for security assistance, weapons construction and many more.

Those who make the laws must come home every few months to preach the gospel of vague promises and beg for money. At the end of the day, you could not name five federal or local officials you pay extraordinary salaries.

If you ever look at your home budget are you a ‘for-profit’ or ‘non-profit’ household? There will always be groceries to purchase, clothing will need replacement, shelter size requirement on how many there are to cram in, transportation (other than walking) will need to be purchased, rented, leased or borrowed to get back and forth from employment to earn enough to pay for all this. Unexpected financial drains like home improvement or medical emergencies should be anticipated with a ‘rainy day fund’. A savings for future college enrollment, vacations and retirement is made with your profit.