What is the difference between NGO and NPO?
NGO and NPO are common terms frequently used. Many people tend to experience a lot of confusion between NGO and NPO.
The article provides the core difference between NGO and NPO in a tabular form. The aim is to provide insight into their meanings and what it stands for.
What Is an NGO?
NGO stands for Non-Government Organization. It refers to an organization formed by the citizens and it tends to be autonomous from the government.
The organization is known to have a broad spectrum of services and humanitarian functions. It normally operates on a regional, national, and international level.
The most interesting thing is that it is a non-profit making organization. It raises funds from the government, foundations, businesses, and private people.
Examples of NGOs across the world are the International Committee of the Red Cross, Rotary International, International Air Transport Association (IATA), International Chamber Of Commerce (ICC), and International Organization for Standardization (ISO).
Main Duties of NGOs
- Handle women’s issues like literacy and counseling
- Enhance institutional infrastructures
- Promote economic development by giving microloans
- Facilitate sustainable water and energy sources
- Eliminate community social problems
- Help to manage emerging health issues like HIV/Aids
- Promote community health and education
What Is an NPO?
NPO stands for Non-Profit Organization. It is a legal entity formed by a group of people with the aim of promoting culture, religion, professionalism, and social objectives.
Members are responsible for raising the initial funds of the organization. The surplus funds are then used to promote social objectives.
The good news is that the organization enjoys free taxation and other things that are done by companies or business units.
Examples of these charitable organizations are sports clubs, social or recreational organizations, public educational institutions, public hospitals, etc.
Comparison Chart: NGO vs NPO
| Basic Terms | NGO | NPO |
| Meaning | It is formed by ordinary citizens and it operates autonomously of government. | It is a legal entity formed by a group of people with the aim of promoting social objectives |
| Stand For | Non-Government Organization | Non-Profit Organization |
| Registration | Under the Public Trust Act | Under section 8 of the Companies Act, 1956 |
| Area of operation | Large | Limited |
| Core Function | Enhance the betterment of society and economy | Facilitate art, science, research, commerce or any other useful purpose. |
| Examples | International Committee of the Red Cross, Rotary International, International Air Transport Association (IATA), International Chamber Of Commerce (ICC), and International Organization for Standardization (ISO). | Sports clubs, social or recreational organizations, public educational institutions, public hospitals, etc. |
Core Differences between NGO and NPO
- NGOs are formed by ordinary people and they operate autonomously of government while NPO is a legal entity formed by a group of people to offer services or products.
- NGO is registered under the Public Trust Act while NPO under section 8 of the Companies Act, 1956
- NGO is an abbreviation of Non-Government Organization while NPO of Non-Profit Organization
- Area of operation of NGO is comparatively wider than that of NPO
- The source of funds of NGOs is government, foundations, businesses, and private people while that of NPO are trusted members.
Comparison Video
Summary
The core difference between NGO and NPO is that NGO help to foster humanitarian or cooperative objective while NPO is an organization that promotes art, science, education or any other social or cultural purpose.