Difference Between NGO and Non-Profit Organizations
NGO vs Non-Profit Organizations
Many people do not understand the principles of, and the differences between, NGO and Non-profit organizations, even though they are well-known terms in the 21st century. First of all, to clarify, NGO stands for a non-governmental organization, and a non-profit organization can also be referred to as a NPO.
Non-governmental organizations are created by legal persons who are not part of the government. Although NGO funds are mostly raised by the government, they maintain a non-governmental position, and eliminate the need for a government council. This type of organization is also known as a civil society organization. There are forty thousand international NGOs in the world, with the most organizations found in India.
In 1945, after the establishment of the United Nations Organization, the non-governmental organizations became extremely popular. Although, before this time, there were other organizations, such as the famous Rotary International, that began its operation in 1904. By the end of the year 1914, there were one thousand and eighty three NGOs in existence. International NGOs played a vital role in the anti-slavery movement, as well as in the movement for women’s suffrage. The official definition of international NGOs was defined on February 27, 1950, by the resolution 288 (X) of the ECOSOC.
Various types of Non-governmental organizations include:
BINGO ‘“ Big International NGO
CSO ‘“ Civil Society Organization
DONGO ‘“ Donor Organized NGO
ENGO ‘“ Environmental NGO
GONGO ‘“ Government-operated NGOs
INGO ‘“ International NGO
QUANGO – Quasi-autonomous NGO
TANGO ‘“ Technical Assistance NGO
GSO ‘“ Grassroots Support Organization
MANGO – Market Advocacy Organization
On the other hand, the non-profit organization does not divide its extra funds between its shareholders, or owners, but uses them for the organization’s purposes. Examples of these organizations are public arts organizations, trade unions and charitable organizations. They offer services and programs through federal, local or state entities. Non-profit organizations hire management personnel, and aim to raise substantial funds. These organizations are service organizations or charities that are established for co-operative, trust or purely informal reasons. NPOs are also known as endowments, or foundations that have huge stock funds. A supporting organization is similar to a non-profit organization, and also operates as a foundation, but they have more complicated structures.
Non-profit organizations do have legal responsibilities, and these may include:
Supervision and management provisions
Economic activity
Accountability and Auditing provisions
Provisions for the dissolution of the entity
Tax status of corporate and private donors
Representation
Tax status of the foundation
Provision for the amendment of the statutes or articles of incorporation
To summarize, the differences between a non-profit organization and NGOs are:
1.The NGO is a non-governmental organization. Its funds are raised by the government, but it maintains a non-governmental position, with no need for a government council. They are also known as civil society organizations.
2.A non-profit organization uses its extra funds for the purpose of the organization, rather than dividing it between the shareholders and the owners of the organization. Examples of NPOs are public arts organizations, trade unions and charitable organizations.
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I would like to know if one organization can be both an NPO AND an NGO.
We are already an NPO in Tanzania and would like to become a Tanzanian registered NGO. So far, I am finding no resources on this.
Any help?
Gayle
Hey Gayle,
I do not see why not. In Canada, NPOs are sometimes funded by the government. So in that case, it would be considered an NGO as well.
We are two females who have a shared vision in empowering, developing and supporting the youth in their goals to reach their full potential. We’re looking into registering the company but do not know how to go about as we are currently conducting research , and whether we should register it as an NGO or an NPO…
Please help
Busi
I HAVE A SIMILAR IDEA AND WILL LIKE TO DISCUSS WITH YOU. contact me at eniteyoung@gmail.com
Hi Enite Young
Still keen on discussing your idea? It’s been so long so I thought I’d check! Thanks
Hey Busi
I had the same Idea. I’ve decided to open an NGO’s. I would love to exchange ideas with you. Please.
Email: Nqobile.l.dlamini@gmail.com
WhatsApp: 0622979826
Hi nqobile…I have been interested in the same vision and would like to communicate with you
My dear sister I would advise u to take npo reason being is that u may look for funds both sides government or any entity that may help with funds
Congrats for this great thoughts. This should be an NPO as it is in volunteering nature
I am researching different types of businesses and am wondering what the main difference is between NGO and Social Businesses?
Any advice would be great.
see jennifer, if your are interested in social investment and has a clear intent to establish your separate entity,then you should go for a civil society entity or an ngo.
i understood that all SHOs are NGOs,but can you say that all NGOs are SHOs? please give reasons for your answer
I’m sorry, Colleen, but more formal distinctions between NGOs and NPOs need to be established here, if in fact they truly are different. Likewise, some of the distinctions listed here are misleading. Just as NGOs are created by “legal persons not a part of the government”, so are NPOs, as NPOs are generally not a product of the government or established as such, just like NGOs. In order to achieve tax-exempt status in the US, NPOs (and I suspect NGOs as well) must be approved as such by the IRS, but government oversight stops there, unless the NPO is specifically created in service to a government function as a mechanism operating independently of governing structures. All of the historic NGOs listed above, such as Rotary International, were initially NPOs, at least here in the United States, where their status had to be legally recognized. So, again, what really is the difference? Most NPOs today are privately established, just like NGOs.
My understanding of NGOs and NPOs is that they both can generate profits, but that proceeds are reinvested back into the institution’s own growth rather than distributed out to shareholders or investors (which makes them donors). Is it possible the difference lies in the internal structure and governance of how these institutions operate? Then what are the mechanics? This article fails to make these distinctions. NPOs generally DO NOT offer their services through government “federal, local and state” entities as mentioned here — most are private and raise monies through both public and private sources. I would assume that NGOs, like NPOs above, can hire management and raise substantial funding of their own. NPOs are not limited to Foundations, but can include them, as NGOs perhaps may not.
I am excited by the potential of the NGO concept being a nonprofit “business” structured as a business to conduct business, but is not driven by traditional profit motives to justify its worth — worth now being defined as service to the community instead of wealth to stockholders. And as some nonprofits clearly operate outside this business framework (such as churches), many NPOs appear in fact to be NGOs as well. So, are NGOs a subset of NPOs, or is there a substantial structural and legal difference between the two? Internal distinctions may be where clarity is realized.
Agreed!
i totally agree with Rajesh opinion
I agree that I am just as confused after reading this article as I was before finding it. I still cannot tell someone the difference between and NGO and NPO
i still dont understand the diffrent between NPO and NGO
In my country Foundations are set up for a cause by wealthy people who seek to make restitution or give back to society. Because they are very wealthy they hardly solicit for external fund for their projects. as a matter of fact they give grants to NGOs with values that they wish to support.
If then NPO do not distribute its earnings to shareholders, that means no one (shareholder) is making or receiving any form of monetory appreciation?
The staff are paid salaries.
if a project is supported by the UN is it a non profit or ngo?
At the general level, there really is no difference between NPOs and NGOs that is worth distinguishing between. Think about it…as John Shelton above says, all NPOs are not part of the government, that is, they are non-governmental organizations.
And all NGOs that I can think of are not in the profit-making business, so that would make all (or most) of them non-profit organizations.
These are just similar terms that have been developed for different reasons but represent essentially the same thing – orgs that are neither of the government nor of the profit-making spheres. There is a wide variety of organizations that fit into both terms…trade and labor unions, overseas development aid groups, neighborhood associations, advocacy groups, eco groups, foundations, etc etc.
There might be legal distinctions that are useful if you’re an accountant or if you’re thinking of forming such an organization. For that, you’ll have to check your country’s laws, since each country is different. You won’t find your answer from this website.
This makes much more sense to me.
Can npo get the exemption in taxes as like ngo?
Mr.Naveen ,an ngo and an npo are both implicitly same entities if not exact in personalities.For your query i would like to say that,tax exemptions are for both
please let me know the technical diff. b/w an ngo and an npo.
These are interesting:
http://en.wikipedia.org/wiki/Non-profit
and
http://en.wikipedia.org/wiki/Non-governmental_organization
I’m sorry, Colleen, but more formal distinctions between NGOs and NPOs need to be established here, if in fact they truly are different. Likewise, some of the distinctions listed here are misleading. Just as NGOs are created by “legal persons not a part of the government”, so are NPOs, as NPOs are generally not a product of the government or established as such, just like NGOs. In order to achieve tax-exempt status in the US, NPOs (and I suspect NGOs as well) must be approved as such by the IRS, but government oversight stops there, unless the NPO is specifically created in service to a government function as a mechanism operating independently of governing structures. All of the historic NGOs listed above, such as Rotary International, were initially NPOs, at least here in the United States, where their status had to be legally recognized. So, again, what really is the difference? Most NPOs today are privately established, just like NGOs.
My understanding of NGOs and NPOs is that they both can generate profits, but that proceeds are reinvested back into the institution’s own growth rather than distributed out to shareholders or investors (which makes them donors). Is it possible the difference lies in the internal structure and governance of how these institutions operate? Then what are the mechanics? This article fails to make these distinctions. NPOs generally DO NOT offer their services through government “federal, local and state” entities as mentioned here — most are private and raise monies through both public and private sources. I would assume that NGOs, like NPOs above, can hire management and raise substantial funding of their own. NPOs are not limited to Foundations, but can include them, as NGOs perhaps may not.
I am excited by the potential of the NGO concept being a nonprofit “business” structured as a business to conduct business, but is not driven by traditional profit motives to justify its worth — worth now being defined as service to the community instead of wealth to stockholders. And as some nonprofits clearly operate outside this business framework (such as churches), many NPOs appear in fact to be NGOs as well. So, are NGOs a subset of NPOs, or is there a substantial structural and legal difference between the two? Internal distinctions may be where clarity is realized.
Read more: Difference Between NGO and Non-Profit Organizations | Difference Between | NGO vs Non-Profit Organizations http://www.differencebetween.net/business/difference-between-ngo-and-non-profit-organizations/#ixzz3EyxAf95y
My understanding of NGOs and NPOs is that they both can generate profits, but that proceeds are reinvested back into the institution’s own growth rather than distributed out to shareholders or investors (which makes them donors). Is it possible the difference lies in the internal structure and governance of how these institutions operate? Then what are the mechanics? This article fails to make these distinctions. NPOs generally DO NOT offer their services through government “federal, local and state” entities as mentioned here — most are private and raise monies through both public and private sources. I would assume that NGOs, like NPOs above, can hire management and raise substantial funding of their own. NPOs are not limited to Foundations, but can include them, as NGOs perhaps may not.
I am excited by the potential of the NGO concept being a nonprofit “business” structured as a business to conduct business, but is not driven by traditional profit motives to justify its worth — worth now being defined as service to the community instead of wealth to stockholders. And as some nonprofits clearly operate outside this business framework (such as churches), many NPOs appear in fact to be NGOs as well. So, are NGOs a subset of NPOs, or is there a substantial structural and legal difference between the two? Internal distinctions may be where clarity is realized.
my mail id –
rajeshlko92@gmail.com
Leadership vs Management
Leadership and management are two terms used to define group behavior in a professional or cultural setting. While leadership means setting up new goals, vision or planning a new strategy, management means controlling the group and organizing it to achieve pre-set goals and objectives according to the values and principles of the group.
Leadership involves a core group or single individuals. Management, on the other hand, involves an entire group and the actions required to make it function in a coordinated manner to help achieve the goals set by the leaders of the group.
Good leadership is all about managing the group properly while good management is about helping the leaders achieve the goals for the collective vision of the group. Management without leadership is usually a futile activity. Without proper leadership, the resources of a group cannot be managed for optimum output. For example, in the case of a country fighting for independence, unless there is proper leadership, there cannot be an optimum management of all freedom-fighters for achieving liberty.
A leadership that cannot ensure proper management is a failure while management without proper leadership is of no use. Only active participatory action by leaders is considered true leadership. A figurehead monarch is not considered a leader.
Leadership and management are inter-connected and inter-dependent concepts. Principles of management can continue to change with the changing times and requirements but the principles of leadership remain essentially the same throughout history.
A leader, whether in the Roman times or the present New Age, would be required to exhibit the same qualities of virtue, valor, confidence, inspiration, etc but management of a Roman army would be completely different from the management of a modern army. Management principles are only behavioral aspects that alter with environment, culture and requirements while leadership principles make people go down in history as great men to inspire generations.
my mail id –
rajeshlko92@gmail.com
Before I was confused about NGO & NPO. Now I am cleared about that. Thanks for sharing.
We are a group of 7 high school learners in cape town. Our age group starts at 16-18 yrs old. We are starting an NPO soon. We have already got the registration forms. What i would like to know first is that do we stand a chance to maintain this NPO? We are very keen in doing this though and our motive is to help, empower and equip the youngstar. Another thing since we’re so young, and have no official skills such as lawyer and auditor or chatered accountant, how do we go about keeping everything legit? Thankyou very much.
NGOs can be and most of the time are NPOs. An NPO or NGO can source its funding from government, government bodies and private foundations and charities.
Any one who lives around Durban with same visions as I have in youth develpoment and starting a business contact me on 0818691334 whats app
Hi I wanted to start NGO… Can anyone suggest minimum how many people need to form an NGO…I am from India -Gujarat-Ahmedabad…
I and 4 other people are looking forward to start a foundation in Nigeria for children. We’ll be focusing on educating and feeding young children. We’ll appreciate it if anyone can tell us how to go about this. Thank you.
Plan (hope, dream) on starting a project and this projects main motive is to start a school and provide free education for children.
I am living in North America and I live paycheck to paycheck. But, I want to go back to my home country (stop running the meaningless race to earn money not appreciating and enjoying the small things/moments in life which matter the most), and start work for other and find my happiness in helping kids who are being deprived of good education because education has become a business, and many low income families (parents) can not educate their children in good schools.
Tell you the truth, I have no capital or investments, I just paid off my student loan after 4 years but, I want to find out how can I make it possible.
I know that Not For Profit is the way to go, because I’m not interested in sharing the profits nor I want any profit for personal growth (NPO should be able to pay salaries to people who work for the school)
Suggestion on implementation, planning is much appreciated
Thanks
Guys mina I’m lost I want to start something small like giving foodpassels to the needy ones in my community,but I really need funding for that so is a book or a Ngo?
Hi. I really think you should start small. Raise funds from friends and family, you can throw it open to a couple more people who you know believe in that kind of thing. Set a date, once a month, once in three months, whatever, and just do it. Don’t worry about registering yet. Do the deed. Then you later register as an NPO maybe after a couple of months. Well done!
This is an interesting and informative read. Thanks for sharing, the comments are insightful too. Thanks all.
Thank’s a lot. Break down the key point “Fund rising”
Good afternoon,
I’m from Zambia, I want to start something like NPO to help the orphan children’s, Assist the farmers for their farming inputs, Medical clinic where its necessary and expand more on what is immediate requirement.
Myself and few other people are looking forward to start this NPO and put in our efforts to develop more. Kindly suggest how to go about this.
Thank you
Good day all.
I would like to start a npo to help teenage mom’s get their lives back on track. What is the first step to starting my life long dream. Where do I go to,what so I do.
Kind regards
Laeeqah
Good evening all…would like to start an NPO..in Nigeria, basically meeting the needs of families/individuals through donations from those who have a lot of stuff /clothes/books/furniture /household. .to those who really need them..is this to be registered as an NGO? PLEASE ADVISE.
Hi,I just started a awareness organisation about 40 above regular members with us.What is better advice for me.I want to dedicate my whole life for society .
rosia.ourvoice ….fb/twitter (India)
This is inspiring and motivating I am more determined than ever to do/start and NPO because for me it’s more about changing and improving the lives of those in sad living conditions than financial gain
I am koffi a small NGO Leader in Africa.I love your post for it is very informative.
There isn’t much different except the leadership/management structures and objectives.otherwise for community based services,the NGO is more favourable.
I just feel so so happy to be here. Finally with like minds. The mind is truest the foundation of all human accomplishments. Been on research to start an NGO n stumbled here.
Please can we form a group to interact and help each other towards a better Africa and the world?
WhatsApp is fine by me. +2348029812346
I feel so so happy to be here. Finally with like minds. The mind is truely the foundation of all human accomplishments. Been on research to start an NGO n stumbled here.
Please can we form a group to interact and help each other towards a better Africa and the world?
WhatsApp is fine by me +2348029812346
You’re right and I am in too.
This is my WhatsApp number: +2348139331606
it is said “likes attract likes” I just started a talent/potential hunt. its aimed at giving everyone the chance to contribute his/her quota in developing the society, thereby making the world a better place for all, I want to create a world where the word “less privilege” does not exist. I intend to realize this vision through what I call “mind transformation”, after which the physical empowerment comes up properly. for except the mind is empowered first, no positive empowerment would be achieved. this program is just three weeks old, I have 50 participants presently. I’m in Jos Nigeria, inputs and like minds are welcome. +2348070702768.
Hi everyone, I have been reading this post plus the comments (they are a lot, i haven’t gone through all of them, but i plan to do so) and I have a question.
In an instance that one wants to register an organization, constituted to empower the youth but still wants to look at the sustainability of the organisation. In that, as it empowers the youth through their opportunities, it can as well have alternative sources of income other than government or external organization donations. Is it possible to register one that has it’s own kind of businesses to raise it’s capital?
Yes. It is even advised that as an NPO, you can have businesses under the organization with the aim of raising funds for the cause of your NPO. How is it going with you?
Good to read from here quiet informative and educative
As a translator of English and Spanish, my impression is that the basic difference between the two is that the NGO definition refers to its power/authority structure and NPO refers to its economic/fiscal structure, while any given org could be both based on its activity in practice. National laws vary on specific definitions, and the range of variety among each category of the entities called NGOs and the entities called Nonprofits adds to the confusion. It seems that usage of either is influenced by culture, in the English-speaking world’s context, influenced by the U.S., which has driven much of the 20th and 21st century development of foundations and the nonprofit sector (based on tax avoidance, but that’s a different story for another day), th term nonprofit is used with great ease and abstraction, while NGOs are often more associated with international agencies and organizations like the UN. In the Spanish speaking world, ONG (NGO) is used quite freely and less so “Org. sin fines de lucro” (NPO, for which there is also no widely used acronym/shorthand, which makes it less comfortable to say/write/read than ONG) .
Hi guys, I’ve been reading your comments and they have been so helpful, I am a 23 aged graduate who is also considering opening a women empowerment organization so I am confused on which type to choose. I am also here to peek on ideas that could strengthen and make my organization to come true and be as active. Anyone who wishes to help can reach me on my email:
kgaugelo9623@gmail
Greetings to all. I am glad to have found myself on this page. It’s just so visionary and like-minded. I would love to solve a challenging problem in Nigeria to educate the girl child then develop her as well as empowering her with resources so as to make her productive to the society also to eliminate inferiority complex amongst her counterparts. it will really help I know.. but I really don’t have so much ideas i can put to work. And don’t know if such a project as this should be registered as NPO or NGO. I would really welcome ideas to be shared with me via my email address.. rachiey202@yahoo.com
Really helpful thank you