What characterizes not-for-profit organizations?

Not-for-profit organizations are characterized primarily by their mission-driven focus rather than a goal of generating profit. They are typically organized to serve a social, educational, charitable, or similar purpose. These organizations are often tax-supported or exempted, meaning they do not pay income tax on the money they receive and can also receive grants and donations that are tax-deductible for the donor. This allows them to redirect more resources toward their programs and services intended to benefit the community or specific groups in need.

In contrast, other types of organizations, such as businesses that operate for financial gain or those that profit from offender labor, have a primary objective centered around generating profit for owners or stakeholders, not meeting a social need. Similarly, funding agencies for large corporate interests typically focus on supporting profit-oriented ventures rather than community improvement initiatives that characterize not-for-profit organizations. Thus, the defining characteristic of not-for-profits is their focus on service over profit, which aligns with the concept of being tax-supported or exempted.