The most common classification of organizations It is carried out with respect to the spirit that motivates its economic activity.
Usually it is understood by companies to for-profit organizations, that is, those whose main objective is to expand and multiply a capital made up of the partners, with the basic premise that the benefits exceed the costs of obtaining a net profit. For example: Nestlé, Kraft, Telefónica.
However, there are also Nonprofit organizations, where the purpose of the activity is not the multiplication of capital but the realization of some type of social purpose, in the sense of cooperation between people and improvements in the general quality of life. For example: World Vision, Wikimedia Foundation, Greenpeace.
Difference over earnings
The identity difference between the two types of organization lies in the use made of the profits, since non-profit organizations obtain economic return from their activity, but all that income discounted from costs is put back so that the organization can comply its function.
It is not true, as is commonly believed, that products carried out by a non-profit organization have no costs, and that employees do not work for a salary: simply the benefits of that activity have no other recipient than the organization itself. In for-profit companies, that profit is the rate at which capital is reproduced, and therefore distributed among the owners of the company.
What has been said so far suggests that non-profit organizations can, by not having added to the price of their products the profit rate for the capital that profit-seeking companies do have, offering the same products at lower and competitive prices. This is part of the logic under which cooperative companies are installed, that is, run by their own workers.
In fact, however, most of the trading companies They are for profit, and non-profit organizations are characterized by fulfilling a social function. The capitalization of non-profit organizations usually occurs from donations, which can come from individuals as well as companies.
The positive effects that a non-profit organization can bring to the community make many times the States choose to promote the constitution of this type of organization through tax exemption.
The mechanisms for the decrease in tax burden In contrast, they require organizations to submit regular reports detailing the progress and status of compliance with the proposed objectives. There are times when governments prefer to discourage these types of organizations, generally by using the means of imposing too many requirements for exemption from taxes.
Examples of for-profit organizations
- ICBC Bank of China
- Ax deodorants
- A mechanical workshop
- ORAL B
- Johnson & Johnson
Examples of nonprofits
- World vision
- Civil association ‘For the boys’ for the rights of the child
- Religious centers
- Wikimedia Foundation
- Danish Council for Refugees
- Doctors without borders
- Sport clubs
- Awid (Association for Women’s Rights and Development)
- El Refugio (Civil Association for Animal Rights)
- Neighborhood centers
- Center for Justice and International Law
- Retiree Centers
- International Amnesty
- Partners in health
- Forum of studies on the administration of Justice
- Parkinson’s disease civil association
- Women’s Learning Partnership