The Difference between a Non-profit, NGO, Charity and Social Enterprise- I had No Idea!
If you’ve ever wondered what the difference between those four terms are?Not to worry, you’re not alone. Whether you’re a veteran social entrepreneur or a budding do-gooder, it’s easy to get confused about where the differences lie between the terms non profit, NGO, charity and social enterprise.
1. Non-Profit Organization
Just like the name says, a non-profit or not-for-profit is an organization that is not about the money (“money, money. Just wanna make the world dance, forget about the price tag!”) It is the kind of organization that asks for funds and needs lots of volunteers. Non-profits focus on a cause (or several causes).
Funding for non-profits comes in the form of grants from organizations and donations from the general public.
The term NGO stands for Non-Govermental Organization. It is a term that was first used to describe the United Nations at its inception in 1945. It slowly gained traction and is now more widely used.
An NGO an organization that is independent from government control that operates on a not-for-profit level. That includes charities and non-profits. You could call it a broad term that encompasses both.
NGOs sometimes rely on the government for funds. However, they do not need government council and are completely independent from it.
A charity is a type of non-profit whose purpose is to, in some way, benefit the general public. A charity’s goals are philanthropic and aim to improve the quality of life for the community and beyond. Below, you’ll find examples of organizations that generally fall under a charitable definition:
Churches or associations of churches.
Hospitals and medical research organizations.
Organizations that provide support for state colleges or universities.
Governmental units of the United States.
A lot of what separates charities from other non-profit is tax exemption. In countries like the USA, a charity is eligible to apply for 501c3 tax-exempt status because of its charitable purpose, and may also be exempt from state and local taxes as well. These charities are also able to receive tax-deductible donations.
This is the trendiest of the others and it is currently buzzing world of entrepreneurship.. A social enterprise is basically a business for social good.
While social enterprises aim to change the world, they understand the need for revenue in order to achieve sustainability and longevity. They have a product to sell and a problem to solve. An example of this is Recycle Points.
Which is these organizations do you feel is the most progressive? Can the world do without non-profits? Please let me know in the comments section.
About the Author
Adaora Okoye is the founder of SDG Factory. She was a part of the Internet Society’s Youth @ Internet Governance Forum 2017 program. She has been a TUNZA Eco-generation ambassador and a UNICEF Voices of Youth Climate and Environment blogging intern.