A nonprofit organization (NPO) is a legal entity that has its operational model built around a collective, public or social cause without the intention of producing a profit for the owners. The revenue generated through fundraising, donations, or other related activities is usually tax-exempt and it has to be used solely to fund operational, administrative, and expansion costs.
Due to the lack of generalized data, the total number of NPOs around the world is difficult to estimate. Nevertheless, the number of NPOs active in the United States is thought to be close to 1.5 million organizations, in the UK the number of NPOs is close to 0.5 million while about 4,300 nonprofit organizations operate in the EU-27.
The scope covered by NPOs is often broad and can relate to religious, scientific, charitable, educational, public, or environmental purposes. It must be noted that there is a difference between ‘nonprofit’ and ‘not-for-profit’ organizations, with the latter referring to entities that exist to fulfill the owner’s organizational objectives and to serve their own membership base rather than society at large.
What is the NPO sector?
The NPO sector, which may sometimes be referred to as the ‘third sector, is the collection of legally established entities within the specific socio-economic sphere that are institutionally separated from the government, operate autonomously, do not distribute their profits to their owners/members, and involve a meaningful degree of voluntary participation from internal or external actors. The NPO sector may have locally, regionally, or globally defined impact borders.
Some of the most popular and influential nonprofit organizations
Here is the list of the most well-known international nonprofit organizations you have probably heard of:
- United Nations Children Fund (UNICEF) is a United Nations program headquartered in New York City that provides long-term humanitarian and developmental assistance to children and mothers in developing countries.
- Environmental Defense Fund is a United States-based nonprofit environmental advocacy group with the mission to preserve the natural systems on which all life depends.
- Red Cross is an international humanitarian movement that aims to ensure respect for all human beings and to prevent and alleviate human suffering.
- Human Rights Watch (HRW) is an international non-governmental organization dedicated to protecting the human rights of people around the world.
- Doctors Without Borders is an international humanitarian medical non-governmental organization of French origin best known for its projects in conflict zones and in countries affected by endemic diseases.
- World Vision is an Evangelical Christian humanitarian aid, development, and advocacy organization that envisions a world in which every child is loved, protected, and cared for.
- Bill & Melinda Gates Foundation is the largest private foundation in the world. Launched in 2000, the primary aims of the foundation are (1) to enhance healthcare and reduce extreme poverty, and (2) to expand educational opportunities and access to information technology.
- CARE International is a major international humanitarian agency delivering emergency relief and long-term international development projects.
- Habitat for Humanity is an international, non-governmental and nonprofit organization that envisions a world where everyone has a safe and decent place to live.
- World Wildlife Fund is an international non-governmental organization collaborating with people around the world to develop and deliver innovative solutions that protect communities and wildlife and the places in which they live.
Nonprofit sector statistics for 2021
- The amount of donations provided to NPOs grew by 4.1% during 2020, with a 12.1% increase in online giving. However, the monetary value of the donations is unknown.
- 41% of the donations made globally were in response to natural disasters
- 31% of people donating to charity did so by connecting with organizations located outside of their country of residence
- 25% of donors giving to charity plan to increase their donations while 54% plan to maintain their current level of giving
- The NPO sector is among those hit hard by the COVID-19 pandemic. A recent survey of 880 NPOs undertaken by CAF America in the midst of the COVID crisis states that around 1/3 of the respondents will be forced to close down within the next 12 months, another 1/3 do not yet know how long they can remain open and 1/3 reported that they will be able to continue operating normally
- The majority of the funds received by interviewed NPOs came from individuals (68%) followed by funds from foundations (48%), corporate donations (45.6%), and institutional funds (29%)
- In an effort to raise the impact and effectiveness of the resources distributed via grants, international donors aim to make the grant process more collaborative by involving a larger number of stakeholders.
DevelopmentAid continually monitors the activity of the largest international NPOs and provides its members with exclusive access to data on their funding opportunities (tenders/grants), awarded projects, and partner organizations. Register today and join the leading business intelligence provider in the development sector.
