What is the Difference Between Charity and Non Profit?
🆚 Go to Comparative Table 🆚The main difference between a charity and a nonprofit lies in their purpose and the way they generate their income. While both types of organizations share the common characteristic of not being driven by profit, they serve different objectives:
- Charity: A charity is a type of nonprofit organization that exists to benefit the community or serve a social or philanthropic purpose. Charities operate solely for charitable purposes and typically rely on public support, deriving their funding from many sources instead of one. They are defined by the IRS as public charities if they earn a substantial part of their income via public solicitation. Examples of charities include churches, educational organizations, hospitals, and medical research organizations.
- Nonprofit: A nonprofit is an organization based on the premise that none of the corporation's net profit from donations, membership fees, or business activities will benefit any individual. Nonprofits are more flexible in their purposes and can serve various causes, not just charitable ones. They come in many different types, including homeowner associations and clubs that are organized as mutual benefit nonprofit corporations because they serve their members' collective interests.
In summary, while all charities are nonprofits, not all nonprofits are charities. Charities are a specific type of nonprofit that focuses on philanthropic goals to improve the quality of life for the general public, while nonprofits can serve various purposes and have more flexibility in their operations.
On this pageWhat is the Difference Between Charity and Non Profit? Comparative Table: Charity vs Non Profit
Comparative Table: Charity vs Non Profit
Here is a table highlighting the differences between charities and non-profit organizations:
| Feature | Charity | Non-profit |
|---|---|---|
| Definition | A charity is an organization with philanthropic goals that aim to improve the quality of life for the community and beyond. | A non-profit organization is one that qualifies for tax-exempt status by the IRS because its mission and purpose are to further a social cause. |
| Types | Charities come in two general types: public charities and private foundations. | Non-profit organizations can include various types such as trade associations, professional societies, and recreational organizations. |
| Tax-deductible donations | Donations to charities are tax-deductible for the donors. | Not all non-profit organizations have tax-deductible donations. Only those with 501(c)(3) status can offer tax-deductible donations to their donors. |
| Funding | Charities often rely on donations, grants, and fundraising activities for funding. | Non-profit organizations can generate revenue through various means, including sales, membership fees, and service fees. |
| Spending requirements | Charities typically have set spending requirements. | Non-profits are free of restrictions on spending. |
| Employees | Non-profit organizations may have employees who are paid, but their paychecks do not come through fundraising. | Charities can have paid staff or be run by volunteers. |
While all charities are non-profit organizations, not all non-profit organizations are charities.
Read more:
- Non Profit vs Not For Profit
- Charity vs Philanthropy
- Charity vs Social Enterprise
- Charity vs Foundation
- For Profit vs Not For Profit
- Charity vs Social Justice
- Philanthropy vs Corporate Social Responsibility
- NGO vs NPO
- Beneficence vs Nonmaleficence
- Net Income vs Net Profit
- Profit vs Profitability
- Profit vs Revenue
- Partnership vs Corporation
- Passive vs Non-passive Income
- Kindness vs Generosity
- Profit vs Gain
- Democracy vs Non Democracy
- Exempt vs Non-Exempt
- Social Enterprise vs Social Entrepreneurship