Meaning of Non-profit Organisation
The Non-profit Organisation is that Organisation which did not do their work for earning profit rather than its main objective is to do work to achieve a specific goal for the welfare of society or its members. These are founded by a group of people who come together for a common purpose, i.e. to provide service to members and people.
These types of organisations run its operation mainly on the donations, entrance fee, subscription fee, or membership fee.Example: Charitable Hospital, Charitable School, College or Educational Institutions, Clubs, Society, Colony or city Gurudwaras, Temple, Church, and Masjids
| Non-Profit Organisation | Profit Organisation | |
| Meaning | Their main objective is to do work to achieve a specific goal for the welfare of society or its members. | A profit organisation is that Organisation that exists to make a profit for its owner(s) |
| Main objective | To serve society for a better future. | To earn more profit to run the business because profit is the fuel of every business. |
| Source of revenue | The main source of revenue for the NPO is Donations, grants, Membership fee, and entrance fee | The main source of revenue is the amount received from selling its products and services. |
| Financial Statement | Financial Statements included the following statements:- 1. Receipts and payment A/c 2. Income and Expenditure A/c 3. Balance Sheet | Financial Statements included the following statements:- 1. Trading A/c 2. Profit/Loss A/c or Income statement 3. Balance Sheet 4. Cash flow Statement |
| Managed by | This type of business is managed by its trustees, committees, or anyone person authorized by the whole members. | It includes mainly three types of business. So it is managed as per the type of business: – 1. Sole Proprietorship – Managed by its Owner 2. Partnerships – Managed by its partners 3. Companies – Managed by its Directors |
| Funded from | It is started with funding received from donations | It is started with initial capital investment by its owner(s). |
