Difference Between NGOs & Non-Profits

Everyone, it seems, has a cause. Provide disaster relief, sustainable living, bring healthcare to the less fortunate, raise literacy rates. These are all noble endeavors, and while you may never go on to form a non-profit or Non-Governmental Organization (NGO) like The Bill and Melinda Gates Foundation, The International Red Cross, or The Salvation Army, the call to do something good and selflessness stirs a desire to help.

What is an NGO?

Though it has no internationally recognized legal definition, an NGO generally refers to an organization that operates independently from any government – though it may receive funding from a government but operates without oversight or representation from that government. For instance, some reports have said that international NGOs raise about $50 billion each year in support, while U.S. based groups and supporters contributed about $13 billion of that total just in 2009, according to InterAction, a Washington, D.C. alliance of U.S.-based international NGOs.

NGOs perform many duties:

  • Community health promotion and education (such as hygiene and waste disposal).
  • Managing emerging health crises (HIV/AIDS, Hepatitis B).
  • Community social problems (juvenile crimes, run-aways, street children, prostitution).
  • Environmental (sustainable water and energy resources).
  • Economic (micro loans, skills training, financial education and consulting).
  • Development (school and infrastructure construction).
  • Women’s issues (women’s and children’s rights, counseling, literacy issues).

What is a Non-Profit?

The Cornell University Law School define a non-profit as: “… a group organized for purposes other than generating profit and in which no part of the organization’s income is distributed to its members, directors, or officers.” While there are many types of charitable or nonprofit organizations, the most common is a Section 501(c) (3) organization, according to the U.S. Internal Revenue Service. This type of organization usually fulfills purposes that are:

  • Religious,
  • Charitable,
  • Scientific,
  • Public safety,
  • Literary,
  • Educational,
  • Fostering national or international amateur sporting,
  • or Preventing cruelty to children or animals,
  • but all on a much smaller scale.

The Biggest Difference between the Two Organization Types
The biggest difference with an NGO is the scope of work that most non-profits assume. Many non-profits are affiliated with churches, boys and girls clubs, and alumni associations. An NGO, on the other hand, has broader and internationally driven footprint, often working in isolated and far flung climates of lawlessness, widespread famine and disease, military bases, and large scale disaster such as hurricane relief.

DifferenceBetween.net summarizes the differences between a non-profit and an NGO as:

  • An NGO’s funds may be raised by the government, but it maintains a non-governmental position, with no need for government representation. They are also known as civil society organizations.
  • A non-profit organization uses its extra funds for the purpose of the organization, rather than dividing it between the shareholders and the owners of the organization. Examples of non-profits are public arts organizations, trade unions and charitable organizations.