Difference Between Non-Profit vs Not For Profit
Non-profit firms are the association of organized persons with an objective rather than profit, like promoting cultural, religious, or educational objectives. In this kind of firm, no profit will be distributed or transferred to its directors, members, or trustees. It is often contrasted with non-for-profit firms, which are set up for social welfare and provides service to the public in general or a group. Here we will discuss the topic Non-Profit vs Not For Profit.
As stated, profit or, say, income is not the sole motive of all these firms, as there is a number of established firms to provide the services to the public and its members. These can be religious organizations, charitable institutions, trade unions, clubs, hospitals, welfare societies, and the list goes on. Such firms will not carry out any trading activity or business. They are under the trustees’ control. 2 of such firms are not-for-profit organizations and non-profit organizations.
Not for profit is a firm that will not earn any profit for its owners. Instead, all the money earned by or donated to a not-for-profit firm will be used to pursue the organization’s key objectives and keep it functioning.
A nonprofit firm or organization is a kind of business granted tax-exempt status by the law or the Internal Revenue Service (IRS) in the USA.
Head To Head Comparison Between Non-Profit vs Not For Profit (Infographics)
Below is the top 6 difference between Non-Profit vs Not For Profit
Key Differences Between Non Profit vs Not For Profit
Both Non Profit vs Not For Profit are popular choices in the market; let us discuss some of the major Difference Between Non Profit vs Not For Profit.
- A Non-Profit Organization is a larger organization or firm when compared with a Not for Profit Organizations.
- A Non-Profit Organization has its own identity and is also a separate legal entity; the Not for Profit Organization is not a separate legal entity.
- A Non-Profit Organization can include a cooperative society or a charitable trust, while Not for Profit Organizations can include an association of persona or body of individuals or clubs.
- A Non–Profit firm or Organization may function as a Not-for-Profit firm or Organization. On the contrary, a Not for Profit Organization cannot work as a Non–Profit firm or Organization.
- Non-profit organizations do qualify for tax-exempted status, while on the other hand, Not-for-profit organizations do not qualify for tax-exempted status.
Non Profit vs Not For Profit Comparison Table
Below is the 6 topmost comparison between Non-Profit vs Not For Profit

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The basis of comparison |
Non-Profit Organization |
Not for Profit Organization |
Basic Definition | A Non – Profit firm or organization is an organization that will promote commerce, science, art, or any other charitable objective. | A Not for Profit organization is an organization that does not distribute its income or say the profits to its owners but will retain it to fulfill the firm’s goals and objectives. |
Scope | The scope of the non-profit organization is wide. | The scope of not for profit organization is narrow and is comparatively less than a non-profit organization. |
Separate Legal Entity | The non-profit organization is a separate legal entity. | Not for profit organization is not a separate legal entity as it is just used as a term for the firms that do not distribute its profit. |
Law Meeting
requirements |
The firm’s profits should be applied for achieving the firm’s key goals and objectives instead of distributing as dividends to its owners. | The company or this kind of firm will not work for earning a profit. |
Tax-Exempt status | Non-profit organizations will qualify for tax exemptions status. | Not-for-profit types of organizations usually do not qualify for tax exemption status. |
Donor benefits | Donations made to a non-profit organization are usually tax-deductible to the individuals or businesses that contribute to them. Still, the nonprofits should publicly make the financial and the operating information so that donors or the contributors are certain about their contributions that have been used for a stated purpose and have been used effectively. | Donations are made to a tax-exempt, which is a not-for-profit type of organization, then the donor may also get the tax deduction. |
Conclusion
Most people often interchange the terms Non-Profit vs Not For Profit to refer to the type of firms or the organizations that do not re-distribute their share of profits or funds back to their shareholders or the owners. In the United States, the phrase “non-profit” is more used commonly. However, not-for-profit type of firms or the organization is rising in popularity. This is because some of the firms want to emphasize that their key or the main goals and objectives do not include making a profit. Rather than that, they are emphasizing more and trying to reveal how to make use of those profits; the public, in general, will see the term “non-profit” as the firm or the organization that makes no profits at all. But most of the non-profits organizations and not for profits organizations do make some profits. But the key point here to note is that instead, they will reinvest those profits back into the firm or the organization and try to achieve the key objectives for which they have been created.
The 2 entities or the type of organizations that we discussed so far are almost alike, but there are still notable differences between Non-Profit vs Not For Profit. The major similarity between them is that both Non-Profit vs Not For Profit firms or the organization are not working to earn the profit. Therefore, the profits earned by these organizations or the firms should be applied for achieving the key goals and the objective of the firm or the entity instead of distributing those profits to its shareholders or owners in the form of dividends.
Concluding remarks while some can use both terms interchangeably, a clear distinction between them is that a not for profit is a kind of activity that is not intended to earn any profits (as taking pictures for personal use), while “nonprofit” refers to an entire firm whose products/operations are not intending to generate a profit (a firm offering free photography classes).
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