What is the difference between a non-profit organization and a non-governmental organization?

What is the difference between a nonprofit organization, a non-governmental organization, a social enterprise, and a charity?

• Answer:

  In the USA, these designations relate to what official identity your organization legally has in the eyes of the federal government for taxation purposes and audit categories. These each have a numerical/letter designation in the IRS codes that you have to select and are awarded when you incorporate successfully. A nonprofit organization is any org that has a Board of Directors who do NOT profit (no stocks, no shares, no pay) from the revenue or activities of the organization. In addition, none of the managers or employees may profit directly either except by compensation. The way around this is carefully scrutinized but often abused via "perqs" and "benefits," but that is capitalism for you. A 501(c)(3) is the most common type of NPO but there are others, among them, a "charity," or an NPO that not only raises or has funds for charitable purposes but awards them to other orgs or individuals as part of its mission (grant-making orgs and direct service orgs that provide housing, goods or scholarships could be in this category, for example). NGOs (non-governmental organizations) are usually used to designate orgs outside the USA that function within a state or country for the benefit of its citizens but whose charters are independent of that country's government (NGOs are not federally managed or staffed). In the USA, government agencies like the public schools are not considered NPOs or NGOs, but orgs that support them, such as NPOs affiliated with a school that are its "educational foundation" or "boosters clubs" are NGOs but not called that in the USA. It's confusing because public agencies and entities like Social Security function like NPOs but since they operate within a governmental charter or oversight, they are not independent and not called NPOs. A "social enterprise" can be a function of any org, NPO or for-profit, if the activities and purposes are for the social benefit, meaning, benefiting the people or geographic area. Some for-profit corporations have "social enterprise" activities or even have a "spin-off" NPO that no longer operates within the for-profit mission or charter. Apple Computers, Microsoft and many other corporations have spin-off foundations and/or other NPOs that conduct social enterprises in their names. I hope that helps. Please rate my response. Best to you.