non-profit organization

Definition

An incorporated organization which exists for educational or charitable reasons, and from which its shareholders or trustees do not benefit financially.

Any money earned by a non-profit organization must be retained by the organization, and used for its own expenses, operations, and programs. Many non-profit organizations also seek tax exempt status, and may also be exempt from local taxes including sales taxes or property taxes. Well-known non-profit organizations include Habitat for Humanity, American Red Cross, and United Way.

Also called not-for-profit organization.

Use this term in a sentence

World Wildlife Fund is a well-known non-profit organization because it exists to raise money to help protect endangered species and preserve at-risk places.

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