Does Not for Profit means that there is no money?

By | 14th February 2017

No… There is money involved… Like in everything… Even time…

What does Not for Profit means then?

A Not for Profit Organisation can raise money, through fund raising, donation, governmental funding, corporate funding or generate income through commercial activities (sales, consultancy work, etc…).

What it means is that any funds received by the organisation is only to be used by the organisation and for the organisation’s purpose.

That is:
– the organisation can use the funds to perform its functions: employ people, conduct projects/programs, rent an office, etc…
– the organisation can not operate as a private business and redistribute the fund to its shareholder. No-one should make a profit from the actions conducted by the organisation. Any benefits are to be used for the purpose laid down in the organisation charter.

But any organisation needs funds to operate…

Let’s take the “extreme” example of an organisation, only ran by volunteers, that does not have/use any funds from its own budget (no income and no expenses). This organisation is still using funds. There are costs associated with most activities. In that case, it does just means that the costs are paid for entirely by the volunteers.






One thought on “Does Not for Profit means that there is no money?

  1. Pingback: Newsletter 4, January/February 2017 | Bee the solution

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