MEANING AND CONCEPT OF NOT - PROFIT ORGANIZATION

Meaning 

Not - For - Profit Organization , also known as Non - Profit Organization , is an organisation set - up to render to the members or to the society without earning profit . Although it's aim is not to earn profit , however , it does not mean it is prohibited from making profit . The main characteristics which differentiates Not - For - Profit Organisation from other is that it cannot distribute profit to its members . It is a separate legal entity not owned by any individual or an enterprise . Examples of such organisations are : school , hospitals , literary societies , societies for promotion of sports , arts and culture ,clubs , etc .

Characteristics or Features of Not - For - Profit Organization.

1. Entity 

Not - For - Profit Organization is a separate legal entity promoted by individuals or enterprises.

2. Services :

Not - For - Profit Organization is established for welfare and service of the society and it's members.

3. Form :

It is set - up as charitable society , trust or club, etc with the main objective of rendering social , educational , charitable or religious service .

4. No Profit Motive :

Not - For - Profit Organization does not function with the objective of earning profit . The surplus is used for the object for which it is established . In other words , surplus of these organisations is not distributed among its members .

5. Funding :

It collects donations and contribution from the members and outsiders to meet the cost of the projects undertaken and also to meet the operating cost .

6. Accounts:

The annual accounts comprises Recieipts and Payments Account , Income and Expenditure Account and the Balance Sheet .