For nonprofit staff looking for resources to help manage their organizations, please take a look at the Idealist.org Resources for Nonprofits.
The nonprofit sector includes organizations that work to fill gaps left by government and business sectors by directly or indirectly working with communities.
Unlike businesses which exist to make money for their owners or shareholders, nonprofit organizations exist to promote a cause or to provide a public service. It's okay for nonprofits to earn a profit, but those profits are re-invested in the organization, rather than disbursed among stakeholders or pocketed by other owners as business profits are.
The nonprofit sector is a part of the private sector because nonprofits are non-governmental by nature.
Nonprofit organizations may be defined by tax status, how they spend their surplus revenue, by their volunteer board of directors, or mission statement.
Also known as: the not-for-profit, tax-exempt, civil, independent, third, social, charitable, or voluntary sector. Internationally, nonprofit organizations are called nongovernmental organizations (NGOs) and charities.
Link to our Nonprofitspeak 101, an online glossary of key nonprofit and career terms.
The nonprofit sector is comprised of organizations working towards a better world, as defined by each of these organizations' missions.
Within the nonprofit sector, organizations have missions that directly contrast with one another — for example organizations on opposing sides of social or environmental issues.
The work of many more organizations however are guided by similar values, goals, and visions.
Nonprofit organizations have varying levels of government oversight depending on the country in which they are located.
Third sector organizations address issues such as poverty, the environment, youth development, community service, health care, workers' rights, public policy, violence prevention, the arts, economic development, and many more. People often think of nonprofits as youth centers and soup kitchens, but they also include religious institutions, universities, hospitals, trade associations and unions, and museums.
In the United States, as recognized by the Internal Revenue Service (IRS) there are three main types of nonprofit organizations:
501(c)(3) – majority of nonprofits, must show broad public support, donations are tax-deductible (e.g., Action Without Borders)
501(c)(4) – advocacy work, donations not tax-deductible (e.g., ACORN)
501(c)(6) – professional and trade associations, donations not tax-deductible (e.g., Chamber of Commerce)
According to the National Center for Charitable Statistics, approximately 1.4 million nonprofit organizations are registered in the United States.
The Independent Sector reports that one out of 12 people in the US are employed by nonprofits, or approximately 12 million individuals, with the majority working in universities and hospitals.
Some have the identical titles as professionals working in the corporate or government sector:
Overlapping titles show that similar skills and opportunities available within other sectors are also useful in nonprofits.
However, many other titles are unique to the nonprofit sector: