Nonprofit
Also called: ideal
Nonprofit means that making a profit is not a goal. Nonprofit organizations have no profit motive. Instead of realizing a financial return, for example to distribute to shareholders, they are created to pursue a concrete mission or task. These are usually idealistic objectives with social value, such as charity, scientific research, education, advocacy, health care or relief work.
Just because an organization's services are nonprofit does not mean they are free. After all, costs are incurred. It only means that no profit needs to be generated at the bottom of the line. Work can therefore be done at cost price. Any surpluses flow directly back to the organization's objective and related activities.
Like commercial businesses, revenues of nonprofit organizations may come from customers, but often they also consist (largely) of grants and funds, membership fees and/or contributions in the form of donations or sponsorships.
Common legal forms of non-profit organizations are the foundation and the association. When the activities are of a more corporate nature, the BV and NV are also common.
