An NGO, a non-governmental organization, established to work for public and social welfare. Such organization is not affiliated with any government. On the other end, NPO as its name suggests, is a non-profit organization, that works for any purpose other than making profits. The line of demarcation between these two organizations is thin and blur, that is why people do not understand the difference between NGO and NPO. Here, we are presenting you an article in which we compared the two organizations deeply. Have a look.
Content: NGO Vs NPO
Comparison Chart
| Basis For Comparison | NGO | NPO |
|---|---|---|
| Meaning | An NGO refers to a non-governmental organization formed by ordinary citizens, that operates autonomously of government. | An organization set up to provide goods and services to people, and operates on the principle that no member will receive share profits or losses of the entity is known as NPO. |
| Registration | Can be registered as a Trust under Public Trust Act, or as a Society as a Socities Registration Act, 1860 or as a non-profit company under the Companies Act, 1956. | Under section 8 of the Companies Act, 1956. |
| Area of operation | Large | Limited |
| Objective | To work for the betterment of society and economy as well, bring awareness of human rights, women empowerment etc. | To promote art, science, research, commerce or any other useful purpose. |
Definition of NGO
NGO is an abbreviation for Non-Government Organization, where refers to an association formed by the citizens, that functions completely autonomous from the government to perform a broad spectrum of services and humanitarian functions. It is a non-profit making entity, that operates at regional, national or international level depending on its reach and connectivity. It can be incorporated as a trust, society or a company. These organizations raises its funds from government, foundations, businesses and private people.
It performs a number of activities, to draw the attention of government towards the citizen’s grievances, advocating public policies, promoting political participation by providing information. There are many NGOs which work for specific issues like supporting human rights, women and children’s rights, environmental or health issues. International Committee Of The Red Cross, Rotary International, International Air Transport Association (IATA), International Chamber Of Commerce (ICC), International Organization For Standardization (ISO) are some well known NGO’s operating worldwide.
Definition of NPO
Non-Profit Organization, or NPO is a legal entity formed by a group of persons to promote cultural, religious, professional, or social objectives.
The initial funds are raised by the members or trustees of the NPO. As the organization is a non-profit making entity, it applies its surplus funds on the promotion of the objectives of organization rather than distributing it among the members of the organization. It is registered under section 8 (old section 25) of the Companies Act. Such organization enjoys several privileges like tax exemption, not required to use the term ‘Ltd’ or ‘Pvt Ltd’ at the end of its name.
An NPO may include a charitable organization, membership groups like sports club or women’s club, social or recreational organization, public educational institutions, public hosipitals, etc.
Difference Between NGO and NPO
The difference between NGO and NPO can be drawn clearly on the following grounds:
- An NGO refers to a non-governmental organization formed by ordinary citizens, that operates autonomously of government. On the contrary an NPO is an organization set up to provide goods and services to people, and operates on the principle that no member will receive share profits or losses by the entity.
- An NGO can be registered by the following methods, i.e. as a Trust under Public Trust Act, or as a Society as a Societies Registration Act, 1860 or as a non-profit company under the Companies Act, 1956. On the other hand, an NPO is incorporated as a company under section 8 of the Companies Act, 1956.
- The area of operation of an NGO is comparatively wider than NPO.
- An NGO works for the betterment, upliftment and development of society and economy as well, bring awareness of human rights, women empowerment, etc. In contrast to NPO, is set up to promote art, science, research, commerce or any other useful purpose.
Conclusion
An NGO is an association of person, that works for promoting humanitarian or cooperative objective instead of a commercial one. On the other hand, the NPO is an organization which is set up to promote art, science, education or any other social or cultural purpose, that intends to use its profit in the promotion of its objectives instead of dividing it among the members.
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