Definition of Nonprofit Organization

Despite different naming framed along the years and in different countries according to different traditions, a distinctive feature of every nonprofit organization is the prohibition, or limit, as in the case of some specific organizations like social cooperatives and social enterprises in Europe, from distributing their assets or surpluses regardless of the presence or absence of tax breaks. A nonprofit organization finds its essence in having the mission of producing and delivering public goods together with advocacy actions, having as inspiring mission, a social objective rather than the search for profits. A nonprofit organization belongs to an institutional sector between state and market. Introduction Private organizations having the mission of delivering public goods produced neither by the market nor by the public system, which fulfill both economic and social missions and pursue a general interest, and whose final objective is not the redistribution of profit, have always existed. In the last few decades they have, however, increasingly become the object of specific attention, due to the increase in both their number and different fields of intervention. Since the early 2000s, at an institutional level, the necessity has been recognized of considering these “new” organizations within a different specific institutional sector from those of the public and the private market. This has triggered the search for a generally accepted definition for these organizations. The point is that, considering the different traditions developed in Europe and North America, as well as the development, since the second half of the twentieth century, of such organizations also in developing countries, there is not yet a unique univocal definition. Some basic features have been distinguished and their fields of activity have also been clearly defined as the 12 described by the International Classification of Nonprofit Organizations (Salamon and Anheier 1997). However, it is not easy to have a “simple common label” agreed upon at an international level, due to the fact that over the years this bewildering array of entities, such as hospitals, day care centers, universities, social clubs, sports clubs, grassroots development organizations, environmental groups, self-help groups, religious congregations, job training centers, human rights organizations, community associations, have been variously known as belonging to the “nonprofit,” the “voluntary,” the “civil society,” the “third,” the “social economy,” the “NGO,” or the “charitable” sector. All these different terms are derived from different traditions in different countries and underline specific aspects. After the alignment of the principal aspects regarding definitions both at institutional and academic level, this entry reviews all the different common appellations reading them according to cultural traditions and general contexts.