Nonprofit organization is neither a legal or technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends. States in the United States defer to the IRS designation conferred under United States Internal deems an organization eligible. They may or may not have shareholders.

While Not-for-profit organizations are permitted to generate surplus revenues they must be retained by the organization for its self-preservation, expansion, or planembers or boards. Many have paid staff including management, while others employ unpaid volunteers and even executiWhere there is a token fee, in general, it is used to meet legal requirements for establishing a contract between the executive and the organization.

Capacity building is an ongoing problem experienced by NPOs for a number of reasons. Most rely on external funding (government funds, grants from charitable foundations, direct donations) to maintain their operations and changes in these sources of revenue may influence the reliability or predictability with which the organization can hire and retain staff, sustain facilities, create programs, or maintain tax-exempt status.