Definition and Explanation of
Non-profit Making Organizations:
People Join together for a number of reasons in voluntary organization:
for mutual entertainment, for protection, or for professional reasons.
There are sports clubs, trade unions, consumer societies, political
associations, and many more. The degree of richness of any society lies
partly in the variety of the voluntary organization it promotes.
Non-profit making organization are those, which do not buy/manufacture
and sell goods and whose primary object is not to earn profit. Their object
is to do good to the society through welfare activities. Examples of
non-profit organizations are clubs,
schools, colleges, Hospitals, Libraries etc. These organizations are also
called non-trading concerns.
From the book-keeping point of view the aim of such organizations is the
pursuit of some interest other than financial benefit, so these may be
termed as Non-Profit making Organizations. Although these organizations are
not meant for profit earning, yet organizations of this sort must have funds
to promote their activities, and these funds must be honestly accounted for.
For example in case of a club, the official elected for this purpose is
called the "Treasurer", one of the key figures on the committee which is
elected to run the club. The others are the secretary, responsible for
organizing the club's activities, and the chairperson, or president, who
controls the meetings.
The treasure's functions are to collect subscriptions, disburse such
funds as are needed in the course of the activities, and report to the
members when required, but especially at the annual General Meeting—an
important occasion in the club's life. At this meeting the activities of the
club are reviewed, criticisms are voiced, or praise is accorded the
committee.
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