A non-profit has to make money to grow and prosper, just like a business. And just like a for-profit business, a non-profit will need to reinvest money in itself (within limits), to survive. But while the remainder of the money taken in by a business, the “profit,” is given to the owners or shareholders,  a non-profit must use the remainder to fulfill its mission and distribute its goods and services to those it was created to help.

Individuals may come together to create a non-profit organization, but they do not receive any legal ownership in the “corporation” as individuals coming together to form a for-profit business would. All of the assets of a non-profit must be used to fulfill the organization’s purpose. And if a non-profit goes out of business, any remaining assets must be donated to another non-profit, whereas in a business, the remaining assets go to the owners or shareholders.

The purpose of a for-profit business is to make money for its owners. A non-profit is generally created to serve the greater good.  A business pays taxes on its profits; a non-profit is usually tax-exempt, but the money made must be used to serve the organization’s mission.