Question

1. What is a Not-For-Profit Organization (NFPO)? Explain in detail the categories of NFPO.

Answer 1

Not-for-profit organizations (NFPO) are types of organizations that do not earn profits for its owners. All of the money earned by or donated to a not-for-profit organization is used in pursuing the organization's objectives and keeping it running.

There are many categories of nonprofit organization. Some of them have been mentioned below:-

1. The most common kind of nonprofit organizations are charitable organisations. Their primary objectives are philanthropy and social well-being (e.g. educational, religious, or other activities serving the public interest or common good). Charitable organizations often depend partly on donations from businesses. Such donations to charitable organizations represent a major form of corporate philanthropy.

2. Private Foundations: A Private foundation solicits funds and donations from a limited number of members who contribute a major portion of donations to the organization. Such foundations generally do not actively or directly engage in actual charitable work. Instead, they fund other organizations that work on the chosen causes.

3. Public Charitable organization: Unlike private foundations, public charitable foundations accepts donations and funds from a large section of people through membership subscriptions. For example, charitable hospitals, churches, medical research centers, educational institutions including schools, colleges and universities.

4. Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.

5. Membership Organizations – The are usually setup for the benefit of the members of the organization.