Certainly, NGOs and NPOs are a great added value to our society.
Performing various activities and progressing towards several, admirable scopes. Frankly, the differences between Non-Government Organizations (NGOs) and Non-Profit Organizations (NPOs) are often not very clear.
It might happen to anyone (unless expert on this matter) to get confused by terminology and scopes. In fact, it is purely around the scope that where we can identify the main difference.
An NGO is an association of person; that works for promoting humanitarian or cooperative objective instead of a commercial one. On the other hand, the NPO is an organization which is set up to promote art, science, education or any other social or cultural purpose; that intends to use its profit in the promotion of its objectives instead of dividing it among the members.
Both NGO and NPO, perform many duties and even though we have a definition of their scopes, the difference might still appear slightly confusing.
We can say that a Non-Government Organization (NGOs) is founded by legal people who are not part of the government.
This short sentence may sound like a paradox because NGO mostly, receives funds from the government but it maintains a non-government position.
Differently, the Non-Profit Organizations (NPOs) use their funds to achieve the organization’s purposes. In fact, the NPO does not divide the funds between owners or shareholders.
Key points to differentiate NPO from NGO (source cmu.edu available here)
Non-Government Organization (NGOs):
- organization that operates independently from any government
- may receive funding from a government
- operates without oversight or representation from that government
- there are over 40,000 international NGOs, with the most found in India NGO Duties
- community health promotion & education managing emerging health crises
- environmental issues i.e. sustainable water & energy resources
- economic empowerment i.e. micro loans, skills training, financial education
- development projects
Non-Profit Organizations (NPOs):
- group organized for purposes other than generating profit
- no part of the organization’s income is distributed to its members, directors, or officers
- offer services and programs through federal, local or state entities
- hire management personnel, and aim to raise substantial funds
- also known as endowments, or foundations that could have large stock fund
- Non-profit organizations do have legal responsibilities, and these may include reporting on: Supervision and management, Economic activity, Accountability and Auditing provisions, Tax status of corporate and private donors