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How they differ

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Although for-profits and nonprofits require similar professionalism and dedication from their leaders, they differ when it comes time to interpret their bottom lines and successes.

The biggest difference between nonprofits and for-profits is the motivation for doing what you do — in other words, the mission of the organization. For-profit businesses exist to make money (you know, a profit). Nonprofits exist for the greater good of all to provide a public benefit.

Evaluating the success of a for-profit endeavor is easy: Did you make money, and, if so, how much did you make? We’re not saying this to cast stones at the capitalist system or to in any way disparage the millions of folks who work for profit-making endeavors. After all, the nonprofit sector depends on profits and wealth from the for-profit sector for its support. And of course, nonprofits have to balance the books, too. Even nonprofits prefer to end the year with more money than they had when they started. They just don’t call it profit; they call it a surplus.

For a nonprofit to be successful, it needs to change some aspect of the human, animal, or ecological condition; it needs to solve a problem, provide education, or build a monument. Because the goals of nonprofits are so lofty and progress toward achieving them is often slow, evaluating nonprofit success is sometimes difficult. See Chapter 9 for information about evaluating the results of your work.

Nonprofit Kit For Dummies

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