NGO (Non-Government Organization) or NPO (Non- Profit Organization) is an organization formed under Section 8 of the Companies Act, 2013 to achieve a specific set of objectives as defined under the Act. These types of companies are formed with the objective of working towards the public development of society at large. This blog will help you in understanding the Difference Between NGO and NPO, The three forms of NGOs/NPOs in India, objectives, and Procedures for establishing NGO / NPO in India.
There are three forms of NGOs/ NPOs in India
- Society
- Trust
- Section 8 Company
A non-governmental organisation (NGO) is a non-benefit government organization, resident-based gathering that capacities freely of government. NGOs, in some cases called common social orders, are composed on the network, national and universal levels to fill explicit social or political needs, and are helpful than commercial in nature.
A non-profit organization is a business that has been allowed tax excluded status by the Internal Revenue Service (IRS) since it advances a social reason and gives an open advantage. Donations made to a not-for-profit association are regularly tax deductible to people and organizations that make them, and the NPO itself pay no tax on donations received.
Even though they might be perceived as similar but they are not the same because non-profit organization can only be registered under companies act and on contrary non-governmental organization can be registered as a trust, society or not for profit organization in their respective acts.
Any NGO ‘s role is to contribute to the nation’s development by engaging in issues such as education, health, livelihood, micro-finance, human rights, and many more. It is up to the NGO to decide on the issues for which they wish to work. In parts of India, we can find several good NGOs working not only on the charity model but also on the model based on rights. NGO ‘s charity concept includes charitable initiatives such as offering the community instant help. It can be Food , Clothing, Medicine, etc. While the right based model involves building local communities’ capacity to stand up for their rights and questioning the system’s discrepancy and keeping track of development as promised by the government. To understand it in a simple way, we can use NGOs to train local farmers on NREGA policies and schemes where farmers begin to ask for their right wages and benefits as promised under NREGA.
Some other differences are that non-governmental organization works for betterment and development of society on the other hand, non-profit organizations works for promotion of art, science, research, commerce or any other useful purpose. There scope differentiates too as NGO has a lot wider scope than the NPO’s. Many non-profit organizations are affiliated with churches, clubs, and associations but non-governmental organizations are often working in isolated lands with widespread famine and disease, large scale disaster etc.
NGO’s depend on gifts, different techniques, forms, projects, undertakings and exercises for rising of assets. An NPO utilizes its additional assets with the end goal of the association, as opposed to isolating it between its investors and the proprietors of the association NPO’s can raise assets through outer business borrowings, remote assets or the assets can be contributed by the individuals or chiefs.
What is an NPO?
A non-Profit Organization or NPO is a legal entity that is formed by a group of people to promote cultural, religious, professional, or social objectives. The members of the trustees of the NPO raised the funds are initially. As the NPO is a nonprofit making entity the surplus funds are applied to the promotion of the objectives of the organization rather than distributing it among the members of the organization.
Registered under Section 8 of the Companies Act. The NPOs enjoy several privileges lie the exemption on taxes. NPOs include charitable organizations or the membership groups like sports clubs, women’s clubs, any social or recreational organization, public education institutions, public hospitals, etc. Non-Profit Organization fulfills the purposes like religious, charitable, scientific, public safety, literary, educational, fostering national or international sporting but on a smaller scale as compared to an NGO.
What is an NGO?
A Non- Government Organization operates independently from any government even though it may receive funds from the Government. NGO is a non-profit making entity that operates at the regional, national or international level and is completely dependent on connectivity and reach.
An NGO can be incorporated as a trust, company, or society. These institutions can raise their funds from the government, businesses, or any other foundation or the general public. In India, there are 3.4 million non-governmental organizations that work in various fields like disaster relief to advocate for the marginalized and the suppressed communities. Many NGOs work for supporting human rights, women’s rights, children’s rights, environmental and health issues.
Point | NGO (Non-Governmental Organization) | NPO (Non-Profit Organization) |
1 | Operates independently of government control and intervention | Operates without the primary goal of generating profits for its members or stakeholders |
2 | Engages in various activities, such as humanitarian aid, advocacy, social services, or development projects | Engages in a wide range of charitable, educational, scientific, religious, or community-oriented activities |
3 | Can be local, national, or international in scope, addressing issues at regional, national, or global levels | Can be local, national, or international in scope, depending on the organization’s mission and target beneficiaries |
4 | Often focuses on promoting social, environmental, or political change, and advocating for human rights or specific causes | Often focuses on providing services or addressing specific needs in areas such as healthcare, education, arts and culture, or community development |
5 | May receive funding from various sources, including donations, grants, membership fees, or international organizations | May receive funding from various sources, such as donations, grants, sponsorships, fundraising events, or government contracts |
6 | Can operate in sectors such as healthcare, education, environmental conservation, disaster relief, or human rights advocacy | Can operate in various sectors, including social services, education, healthcare, arts and culture, sports, or community development |
7 | Often involved in advocacy, lobbying, or campaigning to influence policies, raise awareness, or bring about social change | Primarily focused on delivering services, programs, or initiatives that directly benefit specific individuals, groups, or communities |
8 | Typically engages in partnerships and collaborations with governments, international organizations, or other NGOs to achieve common goals | May collaborate with other organizations, governments, or stakeholders to address specific social issues or community needs |
9 | May have a global reach, working in multiple countries or regions, and addressing global issues or crises | May operate locally or nationally, focusing on specific geographic areas or communities of interest |
10 | Examples of NGOs include organizations like Amnesty International, Greenpeace, Doctors Without Borders, or Oxfam | Examples of NPOs include organizations like the Red Cross, United Way, Salvation Army, or Boys and Girls Clubs |
11 | May be involved in research, policy development, capacity building, or providing technical expertise in their respective fields | May provide direct services, programs, or assistance to individuals or communities in need |
12 | Often relies on volunteers, activists, or dedicated staff members who are committed to the organization’s mission and cause | May have a mix of volunteers, paid staff members, or a combination of both to deliver programs and services |
13 | May have a strong focus on advocacy, public awareness campaigns, and influencing public opinion or decision-makers | May focus on service delivery, community outreach, client support, or specific projects aligned with their mission |
14 | Can be involved in emergency response, disaster relief, or post-conflict reconstruction efforts | Can be involved in social welfare, education, healthcare, environmental conservation, or arts and culture initiatives |
15 | Often governed by a board of directors or trustees, ensuring accountability and adherence to the organization’s mission | Often governed by a board of directors or trustees, overseeing the organization’s operations, financial management, and compliance |
16 | May engage in fundraising activities, donor stewardship, and financial management to sustain their operations and initiatives | Relies on financial management, budgeting, and fundraising to support the organization’s programs, services, or projects |
17 | Can have a broad focus, addressing multiple interconnected issues or sectors related to their mission | Can have a specific focus, addressing a particular societal need or problem in a targeted manner |
18 | Operates with a mission-driven approach, guided by values and principles that align with their vision of social change | Operates with a mission-driven approach, guided by values and principles that align with their intended beneficiaries or the communities they serve |
19 | Often engages in advocacy for policy reform, social justice, or human rights, seeking to create systemic change | Often focuses on direct service provision, program implementation, or community support to address immediate needs or improve quality of life |
20 | Provides a platform for individuals to actively participate, volunteer, or contribute to causes they believe in | Provides a platform for individuals to contribute their time, skills, or resources to support specific programs or initiatives |
21 | May have a global network or affiliations with other NGOs, allowing for collaboration and knowledge-sharing on common issues | May have partnerships or collaborations with other organizations, government agencies, or community groups to maximize impact and resources |
22 | Often operates with a long-term perspective, aiming for sustainable development, social justice, or lasting change | Often operates with a focus on immediate needs, service delivery, or specific project outcomes |
23 | Can work in challenging environments, advocating for marginalized groups, and addressing complex social problems | Can work in diverse communities, delivering programs that respond to specific needs or enhance community well-being |
24 | Focuses on addressing root causes, systemic barriers, or inequalities that contribute to social or environmental issues | Focuses on immediate needs, service gaps, or specific objectives to improve the well-being of individuals or communities |
25 | Often driven by volunteers, activists, or professionals dedicated to social change and advancing their mission | Often driven by volunteers, professionals, or individuals passionate about making a positive impact in their communities |
Benefits of NGOs and NPOs
Both NGOs and NPOs play vital roles in society and offer several benefits. They contribute to social welfare, address pressing issues, and provide assistance to vulnerable populations. NGOs and NPOs often fill gaps in government services and bring attention to important causes. They provide platforms for civic engagement, volunteerism, and collective action. Additionally, these organizations can have a significant impact on policy-making, advocate for marginalized communities, and foster positive social change.
FAQs
What is the main difference between NPOs and NGOs?
The main difference lies in their scope and focus. NPOs are a broader category encompassing all organizations that operate for purposes other than making a profit, including NGOs. NGOs, on the other hand, specifically refer to organizations that operate independently of government control and are typically focused on addressing social, humanitarian, or environmental issues.
Are all NGOs NPOs?
Yes, all NGOs are NPOs, but not all NPOs are NGOs. NGOs represent a specific subset of NPOs that operate independently of government control and often engage in activities related to advocacy, humanitarian aid, or development work.
What types of organizations fall under the category of NPOs?
NPOs include a wide range of organizations such as charities, foundations, religious institutions, social clubs, professional associations, and more. These organizations operate for purposes other than making a profit and may serve various sectors including education, healthcare, arts and culture, and social welfare.
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