Nonprofit vs. For-Profit, What is the Difference?

Is managing a nonprofit like managing a business? How some popular nonprofit organizations are similar to large companies.

Robert Brooks, MBA, Director and Assistant Professor in the School of Business and Technology at Colorado Christian University

Surely one of America's true success stories must be Steve Jobs and Apple, Inc. Apple employs 123,000 full-time employees and operates 504 retail stores in 24 countries. The thought of managing such a huge organization seems staggering. We can only imagine the leadership required to govern an organization of this size and complexity. The people in charge of such a massive operation must have exceptional knowledge and skills.

Consider This

United Way has 2.9 million volunteers, and 9.8 million donors, and operates 1,800 community-based offices in 40 countries and territories.

The Salvation Army formed in 1865, provides assistance to 25 million Americans annually, serves in 130 countries around the globe, and has over 3.2 million volunteers.

When you think of a nonprofit organization, you may think of your church, a food bank or a homeless shelter in your community. But nonprofit organizations are much more far-reaching than those that you see in your community. There are over 1.8 million active nonprofit organizations in the U.S. raising revenue of almost $2.25 trillion and holding over $3 trillion in assets. Nonprofits employ almost 13 million Americans, paying salaries of over $630 million.

Nonprofits in the U.S. not only provide critical services to our society and meet essential social needs, but they contribute significantly to our country and the world's economy.

Much of what is involved in the management of a nonprofit organization is surprisingly not that different from managing a for-profit organization. The executive director or CEO must attract, retain, and motivate a group of employees. The cash, buildings, vehicles, supplies, and other resources of the organization must be used efficiently and effectively as well as accounted for accurately. Goals must be established, programs and projects identified, and operations are overseen to meet the stated goals consistent with the mission of the organization.

But there are differences as well. Nonprofit organizations, unlike profit-making organizations, are unable to raise sufficient operational and capital funds through the sale of goods and services, making them reliant upon the generosity of others. Another difference is that nonprofit organizations have a deep and abiding passion for what they do. While it is not uncommon for profit-making organizations to have people who are passionate about their work, many nonprofit organizations render services that deeply affect the lives of others in ways that are far different from profit-making organizations. It is this passion that brings almost 46% of our country's population into some kind of volunteer work to benefit the lives of others and causes America to be the most generous nation in the world.

Colorado Christian University's Bachelor of Science in Nonprofit Management is preparing adults to take on the challenges of managing nonprofit organizations in the United States and around the world. 

Colorado Christian University does not guarantee any job placement as a result of earning this or any other degrees offered by the university.