NGO and NPO (Non-Profit Organization): Explanation and Difference

October 28, 2020January 16, 2023 Sohini Mazumder 0 Comments

NGO and NPO (Non-Government Organization and Non-Profit Organization): Explanation in Details with Examples

What is Non-Government Organization?

NGO stands for Non-Government Organization. These are a group or association formed by the people, with an intention to serve the people, being a member is not mandatory here. Non-Government Organization sustains due to various donations, funds, membership fees, returns from the sale of goods and services.

As the name suggests, there is no government intervention, yet at times it becomes a necessity for Non-Government organizations to depend on government funding’. One reason for this can be, Non-Government Organization. works for the development and welfare of society and also to look after and fulfill its philanthropy needs. This is why, it becomes hard for the Non-Government Organization’s alone to finance, thus, here government help becomes necessary.

Non-Government Organization can be segregated into 2 major types:

1. Operational Non-Government Organization concentrates development needs.

2. Advocacy Non-Government Organization focuses to promote and spread awareness of a cause and its needs and consequences.

Role Of NGO:

Helps in spreading education in society.
Helps in overcoming the prevalence of gender inequality.
Contributes to protecting and developing a clean environment
Helps in removing caste inequality, removing poverty, and various things so that people don’t face any trouble.

Non-Government Organization’s work both for the national and international levels. For example, there are many international Non-Government Organization’s which works for the promotion of the developing or underdeveloped countries, and also there are Non-Government Organization’s within the country, which works for the nation.

Characteristics Of Non-Government Organization:

NON – GOVERNMENT ORGANIZATION.’s play an important in the promoting of the society, this we have understood, but the characteristics of NON – GOVERNMENT ORGANIZATION.’s, which might sound similar to its role have been mentioned below:

Protecting the environment.
Provides basic social service to society.
Helps the poor by providing them with the necessary items.
Creation of teamwork, peace and also grounds a network among the people.
Promoting training, education, and also spread education.

What is Non-Profit Organization?

Non-Profit Organization, also known as a non-profit institution or non-business entity. On the terms of providing social benefit, these business units are exempted from paying any taxes. Any donations made to these institutes will be tax-deductible, and also Non-Profit Organizations doesn’t pay tax from the received donation amount. The institutes are expected to They’re also required to make financial and operating information available to the public, so that they do not have to face, asymmetric information while deciding for donating. Non-Profit Organizations are restricted from having or practicing any political interests. Their organizing papers should clearly state that they will not contribute to any political campaigns neither will they do any expenses on the political causes, not even on behalf of their members.

Also Read: Difference Between TIN, GSTIN, TAN, VAT, PAN, DSC, DIN

Functions Of Non-Profit Organization:

Like Non-Governmental Organizations, Non-Profit Organization also has some responsibilities towards the society and its people. Few of such functions have been mentioned below:

Non-profit Organizations are exempted from paying any tax to the government, due to which, they are bounded to serve the society so that the government can save their funds for other reasons.
Few religious institutes serve for the welfare of society. They are restricted from joining any political issues. They also are responsible for helping people whenever there is any kind of need or emergency.
There are various non-profit organization which focuses on spreading education and training to the society. This in a way also helps the people by providing quality education facilities.

What is the main goal of Non-Profit Organization?

The goal of the non – profit organizations are to serve society and also to look after the welfare and safety of the people. Furthermore, the government doesn’t tax these institutes, which is why they have a very important role to play.

How does the Non-Profit Organization make money?

The non – profit organizations earn by providing services and help to its people. They also utilize that money to incur their expenditures.

Difference Between Non-Profit Organization and Non-Government Organization:

Both the terms Non – profit organization and non – government organization might sound similar, but they vary. Few of the points which differs between non – profit organization and non – government organizations have been mentioned below:

Non – government organizations can be defined as a group or association initiated by the citizens and they are autonomous without any government intervention. Whereas, non – profit organizations are created to serve people with goods and services. Also the members of, non – profit organizations are not entitled to share any profit or losses.
Non – government organizations are registered Trust as per Public Trust Act or as society as under the Societies Registration act 1860. On the other hand, non – profit organizations are registered under section 8 of the Company Act, 1956.
Non – government organizations have the access to serve a large area, whereas, the non – profit organizations are entitled to serve a limited area.
Examples of, Non-Government Organization are CRY, Smile foundation in India. Examples of Non-Profit organization are WATERisLIFE, Greenpeace.