For-Profit Organizations:
A for-profit organization is an organization that exists primarily to make money for its owners. For-profit organizations range from yogurt stands owned by one person to global corporations owned by thousands of shareholders. Even when they do not actually make a profit, businesses still remain for-profit organizations because their goal is to be profitable. In 1991, General Motors lost nearly 3 billion dollars on more than 100 billion dollars in worldwide sales, but the auto¬maker is a for-profit organization because it seeks to make money.
Not-for-Profit Organizations:
In contrast, a not-for-profit organization focuses primarily on social, cultural, or political goals rather than on making profits. Examples of not-for-profit organizations include labor unions, zoos, religious institutions, and charities. Even though not-for-profit organizations often sell goods and services and collect money from a variety of donors, profit is not their objective. Money is a means to an end for these groups, and the end is meeting constituent's needs. However, this does not imply that the line between for-profit and not-for-profit organizations is absolutely clear. Some not-for-profit companies aggressively compete with for-profit organizations; for example, the American Automobile Association competes with for-profit auto clubs offered by Mobil Oil and others.
A for-profit organization is an organization that exists primarily to make money for its owners. For-profit organizations range from yogurt stands owned by one person to global corporations owned by thousands of shareholders. Even when they do not actually make a profit, businesses still remain for-profit organizations because their goal is to be profitable. In 1991, General Motors lost nearly 3 billion dollars on more than 100 billion dollars in worldwide sales, but the auto¬maker is a for-profit organization because it seeks to make money.
Not-for-Profit Organizations:
In contrast, a not-for-profit organization focuses primarily on social, cultural, or political goals rather than on making profits. Examples of not-for-profit organizations include labor unions, zoos, religious institutions, and charities. Even though not-for-profit organizations often sell goods and services and collect money from a variety of donors, profit is not their objective. Money is a means to an end for these groups, and the end is meeting constituent's needs. However, this does not imply that the line between for-profit and not-for-profit organizations is absolutely clear. Some not-for-profit companies aggressively compete with for-profit organizations; for example, the American Automobile Association competes with for-profit auto clubs offered by Mobil Oil and others.
