What’s the Difference Between Working at a Nonprofit and a For-Profit Organization?

Nonprofit organizations offer a sizable and growing portion of employment opportunities. According to the New York Times, nonprofits in the United States grew by 25 percent between 2001 and 2011, while for-profit organizations grew by just half of 1 percent during the same period. Nonprofits also accounted for 10.3 percent of all private sector employment in 2012.

Many nonprofit opportunities are rewarding and offer remarkable potential for growth. But how do nonprofit environments compare to their for-profit counterparts? Each situation is different, but there are two important things to consider when evaluating your options.

The Purpose of a Nonprofit

Nonprofit organizations were created to fulfill certain benefits to society. Many offer health care services or focus on the needs of poorer Americans, which may help explain the recent growth in these organizations. In exchange, nonprofits enjoy tax benefits that for-profit organizations do not have.

Like for-profit organizations, nonprofits earn income through products and services that are sold. However, nonprofits also rely on private contributions, government grants, grants from foundations, bequests, corporate philanthropy and more. Although profits earned by nonprofit organizations are not distributed to shareholders and cannot benefit an individual in a nonprofit, salaries are not considered personal benefits. As a result, salaries vary widely.

The goal and purpose of a nonprofit organization is not to make a profit — it is to have a positive effect that supports a cause. This purpose not only represents the primary motivation for working at a nonprofit, but it also determines what the organization has to offer its employees.

Differences in Culture

The purpose of nonprofits – or the specific mission – dictates what it’s like to work at the organization. The mission guides how the nonprofit benefits society, how it approaches money and how it meets any type of goal.

Of course, this can come with both its pros and cons. The Case Foundation notes that typically, there is a constant focus on fundraising, which may lead to higher burnout. Clear results can also be difficult to spot.

Nonprofit work also offers plenty of advantages. Less hierarchy means more interaction and the opportunity for growth. The boundaries between the corporate world and community shrink, allowing workers to make a difference and work with people who share the same values. “The opportunity to change the world is around every corner,” the Case Foundation says.

“Working for a nonprofit is like living in a small town,” Rob Asghar writes in Forbes. “Working for a for-profit corporation is like living in a large city.” These analogies can typify culture in these organizations.

Grace College offers a fully online master’s in nonprofit management. This program helps you apply technology, raise funds and successfully advocate your brand.