A non profit organization (NPO) is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends.
While not-for-profit organizations are permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans. NPOs have controlling members or a board of directors. Many have paid staffs including management, while others employ unpaid volunteers and even executives who work with or without compensation (occasionally nominal). Where there is a token fee, in general, it is used to meet legal requirements for establishing a contract between the executive and the organization.
Designation as a non profit does not mean that the organization does not intend to make a profit, but rather that the organization has no owners and that the funds realized in the operation of the organization will not be used to benefit any owners. The extent to which an NPO can generate surplus revenues may be constrained or use of surplus revenues may be restricted.
Not for Profit Organization with context to India
India's complexity as a country lies in its religious, political, ethnic, social, and cultural
Diversity, as well as in its long history of civilization.2 Therefore, defining the non profit sector in
India is a difficult task because no single underlying theme or pattern can characterize development of the non profit sector. Hence, this chapter uses a historical perspective as an analytical tool to describe definitions -- both conceptual and legal -- that are then related to the structural/operational definition of the non profit sector suggested by Salamon and Anheier (1992). The sector and the various terms used to describe it are analyzed in the context of the broader political economy at various periods of history to uncover underlying themes that are useful to understand its present and past role. It is useful to divide the