Profit and Non-Profit organisation

Significant  difference between for-profit and non-profit (not for profit) organisation has as its name suggests that “for-profit” organisation make money for their owners, employees and “non-profit” organisation re-invest profit again into the organisation to fulfill human need for water, shelter, food etc. Profit organisation has invest money in share or any other way to generate more profit, on the other hand non-profit organisation has to invest in such a way that they can increase their profit.

As similar to profit organisation, Non-profit organisation has to also pay their staff salary, electricity bill, rent etc. so they have to also generate profit. They rely on their donors for their donation, while profit organisation rely on their suppliers for their funding.

Non-profit and profit both organisations face competition in their own way. Profit organisation has to always compete with that same type of other business organisations to keep alive themselves in market, while non-profit organisations has to compete also for their donation, product sales, donors, members etc.

Non-profit organisation can give tax benefit to their donors and also they itself can register for tax exemption under Income Tax act. Profit organisations has to pay their tax as per their organisation, partnership and proprietorship.

Profit organisation pay salary to their staff, on the contrary non-profit organisation more rely on volunteers then paid staff. Non-profit organisation also pay good salary to their staff but may be appraisal and rewards are not same as profit organisation.

To sum up, profit and non-profit organisation both earn profit but the covering that profit is different in each. Profit organisation distribute profit in their shareholders, owners etc, while non-profit organisation not distribute their profit but re-invest again to make more profit for environmental or human need.