When it comes to starting an organization, there are a lot of options to choose from. But, one of the most important decisions you’ll make is deciding what type of organization you want to start. Two options are nonprofits and NGOs. But what’s the difference between the two? Let’s take a closer look.
What Is An NGO?
An NGO, or nongovernmental organization, is a type of nonprofit that works to promote social or human welfare. They’re usually formed to address an issue or need that isn’t being met by government organizations. NGOs can be registered as charities, companies, or trusts, depending on their founders and location.
How Do NGOs Operate?
NGOs typically engage in advocacy. This means they try to raise awareness and support for their cause. They also work on projects that directly address the issue they’re trying to solve. For example, an NGO might work on a project to build wells in a community that doesn’t have access to clean water.
Though they are not run by the government, they are typically found where there is a need for change that the government is not addressing. This could be in areas like human rights, the environment, or healthcare. NGOs have staff members who are also likely to cross borders to work on global issues.
How Do NGOs Get Funding?
NGOs are usually funded by donors. This could be individuals, other NGOs, or businesses. Some NGOs also receive funding from foundations or the government.
What Is a Nonprofit Organization?
A nonprofit is an organization that uses its income to achieve its goals, rather than distributing it to shareholders or owners. Like NGOs, they’re usually formed to address an issue or need that isn’t being met by government organizations. Nonprofits can be registered as charities, companies, or trusts, depending on the founders and their location.
How Do Nonprofits Operate?
Similar to NGOs, nonprofits also engage in advocacy to raise awareness and support for their cause. They might also work on projects that directly address the issue they’re trying to solve. Nonprofits must be appropriately registered with federal and local governments and typically hold the IRS 501(c)3 status claiming federal income tax-exempt status.
How Do Nonprofits Get Funding?
Non-profits are usually funded by donations from individuals, businesses, or other organizations. They might also receive funding from foundations or the government. Nonprofits may sell services or products, as well.
Key Differences Between an NGO and a Nonprofit
Now that we’ve looked at the basics of NGOs and nonprofits, let’s take a closer look at the key differences between the two:
-NGOs typically operate in international areas where there is a need for change that the government is not addressing. Nonprofits operate within regions or nationally to reach organizational goals of philanthropy or societal change.
-NGOs meet immediate needs; clean water, food, orphan care, etc. Nonprofits work to meet visionary goals of education, religious training or other worthy and charitable goals.
-NGOs are usually funded by donors, while nonprofits are usually funded by donations.
So, while NGOs and nonprofits sometimes have similar missions, the manner in which they operate may be different. NGOs typically have more direct contact internationally than do nonprofits and NGOs address the immediate needs of people groups, while nonprofits have a vision and advocate for long-term change.