Non-profit

Article

October 17, 2021

Non-profit or not for profit, literally translated without profit or not for profit, means in a broader sense working with a non-commercial, social purpose. The term is often used in the Netherlands in connection with an organisation, the non-profit organisation, which does not aim to make a profit and thus distinguishes itself from a company. Not-for-profit does not mean that no money can be charged for products or services or no profits can be made. Non-profit distinguishes itself in that case because the profit is reinvested in the non-profit organization. A company in Belgium and the Netherlands is by definition aimed at making profit and spending it on owners, shareholders and business goals. In other countries the non-profit corporation is also known, for example in America the nonprofit corporation. In Belgium and the Netherlands there is only the non-profit foundation or association, in other countries there is also the for-profit foundation, for example in Germany the Stiftung & Co KG. The so-called cooperative also exists worldwide, a mixture of company and association. Each country has its own rules regarding non-profit organizations that may differ from the Belgian or Dutch ones.

Purpose and position in society

Non-profit organizations usually refer to private organisations. Governments also operate on a non-profit and public interest basis, but they are not referred to as non-profit organisations. In the Netherlands, the term is used in the social classification of organizations according to financial purpose: the government, the business community and the non-profit sector are known. Civil society is also referred to as the role played by private non-profit organizations in society. The scope and goals of nonprofit organizations are diverse and vary widely. It could be a village music association or an international foundation that cleans up oceans. This may concern purposes of general social benefit, such as art, education, politics, scientific research or development cooperation, or the collective absorption of risks by means of insurance. It can also concern private matters such as the maintenance of family estates or the preservation of a special collection of books or paintings. It may also involve advocacy for a group or profession such as consumers, radio amateurs or heating installers. This often involves organizing activities for members, such as home care, a sports club, social club or providing mutual support, such as self-help groups or a hospice. There are also non-profit hospitals, cinemas, home builders, museums and thrift stores. It is not uncommon for large companies or their owners to set up a non-profit organization, partly to save tax. Well-known examples are the Philips Sport Vereniging PSV, the Ford Foundation, the Nobel Prize and the Bill & Melinda Gates Foundation. Managing a non-profit organization requires different knowledge skills than leadership within a company, there are special training courses.

Income and profit

While non-profit organizations are not for profit, they can and are allowed to make a profit. They generally need income for their activities. These often come from disinterested donations, membership dues, subscription payments, or grants from governments or charitable foundations. However, funds can also be received as compensation for specific activities, services or products. These can be for members only, but also for third parties, who can then be called "customers" just like a company. The contributions for this can be approximately equal to the costs incurred, but also higher. Any positive balance will benefit the organization specified in its articles of association and regulations

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