For-Profit vs Not-for-Profit
Private, nongovernmental healthcare organizations may be either for profit (FP) or not for profit (NFP).
- Discuss the difference between not-for-profit and for-profit organizations.
- What happens if an NFP organization makes a profit?
- What are the advantages and disadvantages of each type of organization?
Difference Between Not-for-Profit (NFP) and For-Profit (FP) Organizations
- Purpose and Mission:
- NFP Organizations: Operate primarily to fulfill a charitable, educational, religious, or social mission. Any surplus funds are reinvested into the organization to further its mission.
- FP Organizations: Operate with the primary goal of generating profits for owners, shareholders, or investors.
- Ownership and Governance:
- NFP Organizations: Governed by a board of trustees or directors and do not have owners or shareholders.
- FP Organizations: Owned by individuals, corporations, or shareholders who receive profits in the form of dividends or retained earnings.
- Tax Status:
- NFP Organizations: Typically exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code (in the U.S.) and may receive tax-deductible donations.
- FP Organizations: Subject to corporate taxes and are not eligible for tax-deductible donations…
Difference Between Not-for-Profit (NFP) and For-Profit (FP) Organizations
- Purpose and Mission:
- NFP Organizations: Operate primarily to fulfill a charitable, educational, religious, or social mission. Any surplus funds are reinvested into the organization to further its mission.
- FP Organizations: Operate with the primary goal of generating profits for owners, shareholders, or investors.
- Ownership and Governance:
- NFP Organizations: Governed by a board of trustees or directors and do not have owners or shareholders.
- FP Organizations: Owned by individuals, corporations, or shareholders who receive profits in the form of dividends or retained earnings. For-Profit vs Not-for-Profit
- NFP Organizations: Typically exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code (in the U.S.) and may receive tax-deductible donations.
- FP Organizations: Subject to corporate taxes and are not eligible for tax-deductible donations…
