Some common nonprofit terms and what they actually mean

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Some common nonprofit terms and what they actually mean

Nonprofits must be aware of a few concepts and the differences between them before going out to make any impact. How you are defined is going to play a key role in how you will be able to operate. Moreover, being in the knowhow would help you get all the tax exemptions and whatever other benefits that might be reserved for nonprofits.

Here are some common nonprofit terms and what they actually mean.


An association is something in which people having common interests come together on a platform. They do so to promote some idea, sport or object. There could be an association of nations too who come together for a common cause. NATO and ASEAN are some examples. When we are talking about an institute, we are talking about an association to promote art, science or education.


This is a structure of people with well defined roles and functions. This is a vast umbrella term which has entities like corporations, governments, non governmental organisations, international organisations, charities, foundations and even universities. WHO and UN are examples of international organisations.


This is a non governmental entity which is established as a nonprofit corporation or a charitable trust with the principal purpose of making grants to unrelated organisations, institutions or individuals for scientific, educational, cultural, religious or any other charitable purposes. There could be either private foundations or grantmaking public charities.

Nonprofit Organisation

A nonprofit organisation is based on the premise that no funds coming from donations, membership fees or any other kind of activity would go on to benefit an individual.


A charity is a nonprofit whose goals are to benefit the general public. It is philanthropic and aims to improve the quality of life for the community and beyond. Churches and the association of churches, organisations which support colleges and universities, etc are a few examples of charities.

This is by no means a comprehensive list and we would keep adding terms to this list as and when we come across something which could be of interest to you. Knowing these concepts and the differences between them will serve you immensely for a long time to come.

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