The IRS defines NPOs as organizations that are “operated exclusively for religious, charitable, scientific, testing for public safety, literary, educational, or other specified purposes.” 

Unlike for-profit companies, nonprofits are accountable to their donors, paid staff, volunteers, the public, and—above all—those they serve. 

The main difference between nonprofits and for-profit organizations is that nonprofits cannot legally distribute profits to shareholders, directors, officers, or private individuals (with the exception of reasonable compensation for services). 

It’s a myth, however, that nonprofits can’t have any extra money in their coffers. In fact, maintaining some level of positive revenue can help these organizations stay resilient in the face of economic downturns and financial rough patches.