Generally speaking, profit is a business term that means return on investment.  It is the reward for putting money at risk in an enterprise, the object of which is material gain for the individual investor in terms of interest, dividends or cash; or for the company in terms of increasing its assets in order to make more profit in the future.  Put simply, profit is a method of generating wealth. 

A non-profit organization has no investors and is not in the business of generating wealth. When it raises money - even money in excess of its immediate needs - the funds are nevertheless destined for eventual application to the public services derived from its mission.  Therefore, there is no profit (monetary gain for an investor) and hence the designation of non-profit.  

This is why the laws of many states and countries prevent any person receiving funds from a non-profit endowment or programmatic activity (other than the salaries of paid staff, of course).  The same laws usually control the dissolution of a non-profit, insuring that its assets go to another non-profit so that no individual may receive a personal benefit from the proceeds.  Clearly, the simple act of raising money lies at some distance from that of making a profit.

Milton Bloch

   

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