WTNY 9-26-2007 00:47
Difference between NPO and FPO
Most experts consider the legal and ethical restrictions on the distribution of profits to owners or shareholders as what fundamentally distinguishes NPOs from commercial enterprises. The use of the term "not-for-profit" rather than "non-profit" has been debated within the field. While there are definitive preferences for one term or the other, there is no broad consensus.
NPOs generally do not operate to generate profit, a characteristic widely considered to be defining of such organizations. However, an NPO may accept, hold and disburse money and other things of value. It may also legally and ethically trade at a profit. The extent to which it can generate income may be constrained, or the use of those profits may be restricted. NPOs therefore are typically funded by donations from the private or public sector, and often have tax exempt status. Donations may sometimes be tax deductible.
Some 'non-profits' are operated by volunteers and/or paid positions. Recently some paid positions have come under question as the salaries of top level executives were in the millions of dollars per year. Additionally, an NPO may have members or participants or beneficiaries or students etc. as opposed to customers in a for-profit organization. One should not generalize about the comparative cost of a 'non-profit' versus 'for profit' organization; there may be a lot of internalized profit in a non-profit organization.