Nonprofit organizations are businesses that advance important social causes and do not earn profits or take in revenues beyond their expenses. Instead, nonprofits are funded primarily by donations from philanthropic organizations, individuals, and governments, although they may also sell products and services or engage in other fundraising activities in order to help support their operations. Nonprofits may qualify for tax-exempt status in the U.S., giving this structure important financial advantages in return for addressing pressing social issues, environmental problems, and other challenges we face.
Because these organizations do not fund their operations through profits, successful nonprofit sector management is different in some ways from running a conventional business. In particular, nonprofit development professionals and fundraisers must nurture a network of donors and ensure that they support and understand the impacts of their work. At the same time, today’s best practices for social entrepreneurship draw on many of the same principles as for-profit startups, including innovative uses of data and technology as well as human-centric approaches to problem solving and such as design thinking.