University of Maryland Extension

What about not-for-profits?

Dale M. Johnson, Extension Specialist, Farm Management

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Not-for-profit organizations need to understand their finances just as much as for-profit businesses do.

Not-for-profit organizations do make profits (or positive net income). The difference is that not-for-profit organizations do not distribute profit to the business owners or shareholders. Both for-profit companies and not-for-profit organizations can reinvest profit back into the business

The concepts and financial statements in this chapter are used by both for-profit and not-for-profit organizations. However, there are some differences in vocabulary and accounting logistics. Some of these differences will be pointed out throughout the text. For more financial management information specific to not-for-profit organizations, see the resource list at the end of this chapter.

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