What distinguishes a non-profit organization from a for-profit organization?

The distinguishing characteristic of a non-profit organization is its prioritization of community welfare over profit. Unlike for-profit organizations, whose primary objective is to generate financial returns for shareholders through dividends and revenue maximization, non-profit organizations focus on fulfilling a specific mission or addressing social issues. This mission often includes providing services, advocacy, or support in areas such as education, health, environment, or social justice.

Non-profits reinvest any surplus revenues back into their programs and initiatives to further their social objectives rather than distributing them as profits. This commitment to serving the community and addressing societal needs is what fundamentally sets non-profits apart from for-profit entities, which operate with a goal of profit generation and competitive advantage in the marketplace.