Compare And Contrast Profit And Nonprofit Organizations

Have you ever wonder the type of business would you like to have? When starting a business the entrepreneurs have to decide what type of organization they planning to have. Profit and nonprofit, are the most common types of denominations that an organization may have. Both profit and nonprofit organizations it may appeared to be similar but they contrast in the source of income and distribution, the ownership, and the main purpose.
According to Merriam-Webster dictionary, the nonprofit term was first used in 1896 and defines a nonprofit organization as the organization not conducted or maintained for the purpose of making a profit (Merriam-webster). The seventy percent of the Americans give to nonprofit organizations every year (Statisticbrain.com). On the contraire, a profit organization is conducted and maintained with the objective of making money.
Even though profit and nonprofit organizations have a source of income, they differ in the way the income is received and distributed. A profit organization receives its income from the sales revenue in the form of cash or receivables distributing the profit, not always evenly, to its members. On the other hand, the main source of income for a nonprofit organization comes from donations and grants that have to be invested back into the organization or give it away to another nonprofit

For a nonprofit organization, the public service in which the community can be benefit is the purpose. Some of the areas in which the nonprofit organization concentrates are food, water, shelter, and education. Nonprofit organization also focuses towards other issues such as deforestation and endangered species. A profit organization has its purpose very clear: earn a profit for its members. In order to accomplish their purpose this companies usually offer products and services that are valued in the