Question

define npo and its features ​

Answer 1

Answer:

Meaning of Not-For-Profit Organisations:

The sole purpose of any business organization is to earn profit. In other words, they work for self-interest. However, there are some organizations whose basic aim is to serve the society i.e. they work for the benefit of the society as a whole. These are called not-for-profit organizations or non­profit organizations.

Features:

1. Main Aim is Service:

The basic aim of non-profit organizations is to serve the society. They are working for the benefit of the society as a whole.

2. Profit is not the Criterion:

Non-profit organizations are formed for some idealistic purposes such as religious, charitable or providing education etc. Earning of profits can never be their aim.

3. Surplus not Distributed among its Members:

Though earning profit is not the criterion for non-profit organizations, yet there may be excess of income over expenditure or excess of expenditure over income. The former is known as ‘surplus’ and latter is known as ‘deficit’. Unlike other business, surplus or deficit of non-profit organizations is not distributed among its members. They are adjusted in the capital fund of such organizations.

4. Separate Entity:

The separate entity concept is equally applicable to non-profit organizations. Such organizations are treated as a separate entity distinct from its members.

5. Unique Names Connoting their Working:

The names of non-profit organizations denote the nature and style of their functioning. For example, JMD Educational Society, Shri Sai Keertan Mandli, Shri Sunder Dev Sports Club and Shri Sanatan Dharam Ramlila Committee etc.

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