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Not for profit 101

What does ‘Not for Profit’ mean?

Put simply, a Not for Profit is what is says it is.

Not for Profits are organisations whose purpose is not to make money for owners but instead to fund the activities/purpose of the organisation itself which are established for a community purpose.

The language around Not for Profit organisations varies. Not for Profits can also be called Non profits, community sector organisations, third sector organisations, civil society organisations, or part of the voluntary sector. The names for it are almost as diverse as the myriad of organisations that comprise it.

Significantly, over the past five years,the boundaries between Government, Corporate and Not for Profit sectors have blurred. There has recently been an emergence of hybrid organisations: businesses who operate with a social purposes not purely for profit, Not for Profits who run enterprises to generate profit (social enterprises) and Governments who encourage the commercial development of Not for Profits through facilitation via the Community Development Financial Institutions (CDFI’s)

Who does the Sector cover?

The Not for Profit sector within Australia is large and diverse. The latest information on the sector (the 2010 Productivity Commission report) indicates that the Not for Profit sector spans over 600,000 organisations nationally.

Only 59,000 of these actually employ staff or access tax concessions, but these 59,000 employ close to 890,000 people in Australia (ie: 8% of our national workforce) and has shown strong annual growth of 7% from 1999 – 2007.

Whilst we know economically that the sector delivers $43 billion contribution to Australia’s GDP (4.1% – twice the size of the Agricultural sector) there is no formal measurement of the overall intangible positive impact that the sector has on community well being. And intuitively we know that this is important. There is therefore, much new work being done around measuring the impact of Not for Profit sector organisations in their different areas of endeavour.

See the Pro Bono Australia Sector Factsheet online for more details about the sector.

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