Nonprofit or For-Profit?
Learners learn the characteristics and impact of the nonprofit sector and distinguish it from the for-profit sector. They identify the mission statement in a familiar nonprofit organization.
Provide this background for understanding the work of nonprofit and for-profit organizations:
Our society is made up of three sectors that deliver the goods and services we need: The government, business, and nonprofit sectors.
- The job of the government sector is to protect citizens, provide basic needs, and ensure justice for all.
- The job of the nonprofit sector is to promote the public good by relieving needs and improving life.
- The job of the business sector is to exchange goods and services for the profit of owners.
The nonprofit sector is also called the independent sector, charitable sector, voluntary sector, third sector, and civil society sector. The people and organizations in this sector provide a public benefit that government doesn't meet.
The business sector is also called the for-profit sector or market sector, and it responds to consumer demand.
The Nonprofit Sector provides ways for individuals and groups to address needs and make change in society and promote public good. This may include the advancement of health, education, scientific progress, arts, environmnet/animals, social welfare, or the free expression of ideas. The nonprofit sector includes organizations, like 4-H and American Heart Association, but also individual volunteers who give their time to address needs.
Before showing this brief video that illustrates how the nonprofit sector responds to a need, ask viewers to watch for what need Cayden identified, and what steps he took to address the need.
Discuss the need and what steps Cayden took. Can one young person make a difference?
Nonprofit organizations are entities that serve a purpose for the common good. This differs from businesses like Amazon and McDonald's, which are private businesses that exist to turn a profit for themselves and their shareholders. Raise awareness of the designations ".com" for for-profit organizations and ".org" for nonprofit organizations.
The American nonprofit sector plays a crucial economic and social role in society.
- In 2019, more than 1.5 million nonprofit organizations of all kinds were registered with the Internal Revenue Service (IRS).
- The nonprofit sector contributed an estimated $1.047.2 trillion to the US economy in 2016.
- In 2018, total private giving from individuals, foundations, and businesses totaled $427.71 billion.
- An estimated 25.1 percent of US adults volunteered with a nonprofit organization in 2017, contributing an estimated 8.8 billion hours. The value of all of these volunteer hours is approximately $195 billion. That's right, volunteering has real tangible benefits to the organizations you help and society itself!
Nonprofit organizations can make a profit and pay their employees, but all profits are put toward the mission, not paid to stakeholders. Since they do a public good, they don't pay taxes.
Most nonprofits have a mission statement that describes what all the stakeholders in the organization are working toward. A mission statement is like their tagline or catchphrase. Together, look up (on the About page of their website) the mission statement of a few nonprofits and talk about what they have in common:
- Sierra Club -
- St. Judes -
- American Heart Association -
- 4-H -
- Learning to Give -
Discuss which of these examples of nonprofit mission statements inspire you to take action and change. Why?
Working individually or in pairs, participants look up the mission statement of a nonprofit organization they are familiar with. They share with the group what they like about their mission statement.
Explore the idealist.org website to find nonprofits of different missions. Click on the "organizations" heading to find the listing of nonprofits.
Reflect on the following:
- What are some nonprofits in your community?
- What are issue areas that interest you?
To show understanding of the work of hte nonprofit sector, have each youth identify a need in the community that they have a heart for and want to learn more about.
Strand PHIL.I Definitions of Philanthropy
Standard DP 02. Roles of Government, Business, and Philanthropy
Benchmark MS.6 Identify significant contributions to society that come from the civil society sector.
Standard DP 04. Operational Characteristics of Nonprofit Organizations
Benchmark MS.3 Describe how a specific civil society organization in the community operates.
Strand PHIL.III Philanthropy and the Individual
Standard PI 01. Reasons for Individual Philanthropy
Benchmark MS.11 Identify a corporation's responsibilities to its community.
Standard PI 02. Careers In The Nonprofit Sector
Benchmark MS.1 Identify and explain how career options in the civil-society sector contribute to the community.