NGOs are legally constituted organizations which are created by a separate entity or individual who has no affiliation with the government. Their motive is not to make money but to pursue and promote social and charity welfare. Despite being not part of a government setup, they usually generate funds from the government and pass them to the general public. Their activities are usually larger in scale and may include operations on how to tackle international factors such as development work, environmental protection and human rights. Their main aim is to seek a social transformation which positively impacts on the quality of life. According to the UN’s Economic and Social Council, NGOs are those international organizations which are not formed by an international treaty. Some of the famous NGOs include Red Cross, Save the Children, Rotary International, United Nations Environment Programme (UNEP).
NPOs are non commercial organizations whose main aim is to retain the surplus generated from the business activities rather than distribute it among its owners or pay it out in the form of dividends. Its structure resembles that of a corporation – board members, staff, wages - but their functions may be different as defined by the IRS rules with the revenue retained for expansion and promotion of welfare. NPOs can be formed for various purposes such as charity, education, religious, art groups etc. They usually generate money from the private sector and use it to support the community. They maybe further entitled to government funding as well.
Both forms of organizations will have a tax exempted status and will be protected from personal liability. The main advantage for these organizations is that they can experiment with various ideas on how to provide welfare to the society. Moreover, they have the ability to communicate at all levels, with little to no interference from the government. Also, they can hire volunteer workers to carry out their activities.