Money vs. Profit

People often confuse organizations that are non-profit with those that have profit-making as their goal.

Are colleges and churches non-profit? Most folks would laugh and say, “Are you kidding? Those organizations have LOTS of money and are too greedy!”

What’s the difference?

Profit. These orgs are privately owned and/ or publicly owned (shareholders). Some monies may be returned to owners as income/dividends. They pay taxes.

Not-for-profit (also called non-profits) These orgs are NOT owned by private individuals/groups and MUST re-invest monies back into the organization. They are tax-exempt.

Types of Profits/Non-profits

Profits: Yahoo, American Express, Microsoft, Prudential, Katz’ Deli, the New York Yankees, CNN, Wendy’s, ATT, Citibank, Alice’s Restaurant, The Gap, Rasheed’s Auto Shop

Not-for-profit: the Roman Catholic Church, Yale, Nutley Public Library, the AMA, Newark Boys’ Choir, the Supreme Court, the Red Cross, the AFL-CIO, MADD, Denver Opera House

All organizations want MONEY

Yes, the fact of life is that to exist, grow and gain power all of them want and need money. There is NO exception to this rule. However, where the money goes matters!

Now, think about: Where does the money go? What is the “bottom line” for profits and non-profits? Who makes these decisions? Who is accountable for the consequences of these choices?