NGO and NPO differences

by | Jul 28, 2022 | Blog

NGO stands for Non-Governmental Organisation and NPO stands for Non-Profit Organisation. NGOs are created by legal persons who do not belong to the government. NGOs are mostly funded by the government, but as they are not part of the government, they do not require a government council. NGOs may also be referred to as civil society organisations. There are currently around 40,000 international NGOs around the world. Most of these NGOs are situated in India. Famous examples of these organisations are Greenpeace International and World Wildlife Fund (WWF).

After the formation of the United Nations Organisation, which is an intergovernmental organisation whose purpose is to maintain international peace and world security, NGOs became increasingly popular, and their numbers skyrocketed. NGOs most often are involved in the fight against poverty, poor healthcare, environmental issues and social exclusion. This includes pivotal movements such as the anti-slavery movement and women’s suffrage.

Shareholders and owners of NGOs can receive extra funds which are not used for charitable means. In contrast, NPOs never divide extra funds between its shareholders or owners and use all funds for the organisation’s purpose. NPOs offer services through government entities. The organisation will hire management personnel and other personnel with the aim to raise substantial funds which can then be used to fulfil the purpose of the NPO. NPOs may also be known as endowments or foundations. Famous examples of NPOs are the Red Cross and Salvation Army.

As NPOs have a responsibility to fulfil their purpose and use donations received ethically, they have various legal responsibilities. These include supervision and management to be put in place, accountability and auditing provisions, provisions for the dissolution of the entity, tax status of corporate and private donors, representation, tax status of the foundation and provisions for the amending of the NPOs purpose. In the UK, these organisations are regulated by The Charity Commission.

For further information please refer to the links below:

Legislation on Non-Governmental Organisations (NGOs) in Tanzania, Kenya, Uganda, Ethiopia, Rwanda and England and Wales

Setting up a social enterprise


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