Difference between nonprofits, NGOs and charities

It can be difficult to know the difference between nonprofit and charity and the difference between NGO and charity. Below is information on what makes each different so if you are considering supporting a worthy cause you know more about what type of organisation you are supporting.

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Through our programs, we focus on giving children a healthy start in life, the opportunity to learn and protection from harm. When a crisis strikes, we rapidly respond to save children's lives. We always make sure children's unique needs are met, their voices are heard and we deliver lasting results for children all over the world. Here is the difference between nonprofit and charity http://elliesrun.org and the difference between NGO and charity.

Difference between nonprofit and charity

A Nonprofit (also referred to as a not-for-profit or NFP) is an organisation that is not run for profit or personal gain. A Nonprofit can legally make a profit but it has to reinvest those profits back into the organisation to further fund its purpose or mission (e.g. to pay for day-to-day expenses, pay staff wages, build infrastructure or launch projects).

Examples of nonprofits include:

  • Community sports club

  • A religious mission

  • An educational or social organisation such as a recreational facility

  • A well-being organisation

  • A scientific organisation

A charity is a type of not-for-profit organisation however the main difference between a nonprofit and a charity is that a nonprofit doesn’t need to reach a ‘charitable status’ whereas a charity, to qualify as a charity, needs to meet very specific or strict guidelines. In addition to being not-for-profit, a charity must only have charitable purposes (as deemed by Australian law) for the public benefit, not be a government entity, individual or political party and not have a disqualifying purpose (e.g. a purpose that goes against these requirements).

Another difference between a nonprofit and a charity is that a charity must register and comply with the Australian Charities and Not-for-profits Commission (ACNC). Once a charity has a charitable status it then qualifies for charity tax concessions (not-for-profits can qualify for tax concessions but they differ from concessions for a charity). If a charity is registered as a Deductible Gift Recipient (DGR) then donations made to that charity are tax deductible.

Difference between NGO and charity

NGO stands for Non-Government Organisation. NGOs are non-profit organisations that set up and operate independently from local, state or international governments. NGOs generally tend to address public, social, or political issues - without any affiliation to the government. They also typically represent more widespread, larger scale/international projects. The main difference between an NGO and a charity is, as above, that a charity has set requirements that it must meet to be classed as a charity, whereas an NGO doesn’t.