An entity that possesses the following characteristics that distinguish it from a business enterprise: (a) contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return, (b) operating purposes other than to provide goods or services at a profit, and (c) absence of ownership interests like those of business enterprises. Not-for-profit organizations have those characteristics in varying degrees ([FASB Statement of Financial Accounting] Concepts Statement No. 4, paragraph 6). Organizations that clearly fall outside this definition include all investor-owned enterprises and entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance companies, credit unions, farm and rural electric cooperatives, and employee benefit plans (FASB Concepts Statement No. 4, paragraph 7).
is a synonym for non-profit organization. Non-profit Organization is an organization governed by a volunteer board of directors, and whose business is not conducted for profit. Organizations of this type are said to belong to the non-profit or third sector, which is to say, they are neither government (public sector) nor business (private sector). For comprehensive information on the non-profit sector in Canada see the NonprofitsCan.org website.