A nonprofit organization is a corporation, LLC, unincorporated association, or other legal structure formed for not-for-profit purposes. Its not-for-profit purpose is declared when the legal structure is formed. Obtainment of 501(c)(3) or other tax exemption does NOT define whether the organization is a nonprofit.
A nonprofit organization is an organization that serves the public interest. In general, the purpose of this type of organization must be charitable, educational, scientific, religious or literary. The public expects to be able to make donations to these organizations and deduct these donations from their federal taxes.
A nonprofit organization is exempt from paying federal corporate income tax. While these types of organizations also are often exempt from paying state and local sales tax, property tax and taxes on other assets, this is not always the case as states have different rules.
A nonprofit organization has paid and volunteer staff, but employment taxes and federal and state workplace rules are generally no different than those imposed on for-profit organizations. *A poor practice is pay low salaries. Nonprofit organizations can make a huge difference in how closely it compares to a for-profit business.
A nonprofit organization can have clients, can offer products and services, will need revenue, should market itself, and must be concerned about customer satisfaction whether in those assisted or those who contribute donations in support of operations, programs or services. It is a business that must serve the public interest and it will succeed or fail as any business will, depending on how well it is operated.
The difference between nonprofit and for-profit organizations is that nonprofits do not declare a profit and instead utilizes all revenue available after normal operating expenses in service to the public interest while for-profits distribute their profits to their owners or stockholders.