nonprofit organization [non-governmental organization (NGO), charitable organization] a corporation whose mission is to improve people's lives and communities through, for example, health care, education, the arts, science, sports, religious programs, the environment, historic preservation, etc. >> NONPROFIT SECTOR, NONPROFIT ASSOCIATION, 501(c)(3) TAX-EXEMPT STATUS, SOCIAL ENTREPRENEUR, CROSS-SECTOR PARTNERSHIPS

>> Expanded definition << If you volunteer or you'd like to get more involved in your community, chances are you'll serve through a nonprofit organization. Nonprofits include everything from animal shelters to hospitals, soccer leagues to universities, art museums to churches, and more. For example, your community probably has a local chapter of the Red Cross, United Way, or perhaps Engineers Without Borders.  Whether their headquarters are located in your town or New York City, they work at the community level. If calling these groups "nonprofits" feels awkward, you can think of them as community-based organizations. Outside the U.S., groups like these are usually called NGOs [non-governmental organizations] and includes organizations that are not part of government or the business sector, for example, labor unions. The term "civil society" is also used, especially outside the U.S., for citizen-run organizations. In countries that are emerging from dictatorships, the development of "civil society" organizations has been critical. Notes on usage For a long time, nonprofits in the U.S. were simply called charities because they were—and still are—the recipients of financial donations (charity) from individual donors and businesses.  The term charity is rapidly going out of usage as nonprofits gain greater visibility for their work, develop professional staffs and Boards of Directors, and partner with business and government. In the future, they may be called "social benefit" organizations and many are already moving in the direction of using for-profit models to raise funds. Organizations which are distinguished by entrepreneurship and innovation may be called social enterprises. See, SOCIAL ENTREPRENEUR, SOCIAL INNOVATION. In the United States, a nonprofit organization is formed through the same process of incorporation used to form private businesses. State and federal laws apply.  However, a nonprofit organization is distinguished from a for-profit corporation because its mission is to benefit society and profits (if there are any) must benefit the organization (rather than shareholders). Under our tax laws, a nonprofit's corporate income is exempt from taxation.  If you’ve ever made a financial donation to a nonprofit organization, you have probably been told that your contribution is tax-deductible because the organization is a nonprofit 501(c)(3) organization.  That means that you are making a contribution which is tax-deductible (to you) because the organization applied for, and received, a certificate of tax-exempt status from the Internal Revenue Service under Section 501(c)(3) of the Internal Revenue Code. Nonprofit organizations which have a 501(c)(3) tax-exemption are prohibited from engaging in certain activities, notably participating in elections (supporting or opposing candidates). Violating this prohibition results in loss of tax-exempt status. Nonprofit organizations may engage in advocacy of all types, e.g., events, public education, Capitol Hill days, and lobbying (subject to some restrictions).

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