Understanding the non-profit sector and its current environment

Addressing Societal Needs and Challenges


This training session introduces to the non-profit sector and  non-profit organizations and aimed to encourage youth to gain knowledge, experience, and entrepreneurship to have better perspective on the labour market. It targeted young people under 30 years of age, more specifically the unemployed who were looking for their first job, or those without working experience who were entering the labour market, or those who were finishing their education, or those who had a business idea. While this course has been developed with mostly European culture in mind, we do appreciate that in other parts of the world the nature of the non-profit sector and non-profit organizations may not be the same. Nevertheless, it is our hope that much of the course content will still be of value to those in other parts of the world.


  1. Key question of Understanding the non-profit sector and its current environment the chapter
  2. Key words of Understanding the non-profit sector and its current environment the chapter
  3. Substantive part/information
  4. Activities for the reader(s)
  5. Multiple-choice self-assessment test
  6. Links to self-study resources
  7. Conclusion
  8. References

Key question

  • What is the non-profit sector and why does it exist?
  • What are the unique characteristics of non-profit organizations?
  • What are the trends and emerging issues facing organizations in the non-profit sector?

Key words

  • Non-profit Sector
  • Non-profit Organizations (NPO)
  • Servises

Substantive part/information

The Non-profit Sector is usually comprised of organizations whose purpose is to benefit and enrich society, often without profit as a motive and with little or no government intervention. The money raised or earned by a non-profit Organization in the voluntary sector is usually invested back into the community or the organization itself. Although this sector is separate from the public one, many organizations are often tightly integrated with governments on all levels to support it in the delivery of programs and services.

The money raised or earned by a nonprofit Organization in the voluntary sector is usually invested back into the community or the organization itself.

A Non-profit Organization (NPO) is dedicated to furthering a particular social cause or advocating for a shared point of view. Since non-profit organizations by definition earn no profit, they are generally not taxed on excess revenue. They provide a service to the community that for-profit companies will not provide because often there is no way to make a profit on the type of services the non-profit provides. NPO is an organization that does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals. The fattest line on most non-profits’ budgets is payroll and benefits, and yet non-profit organizations remain infamous for underpaying talent.  Every day people come to work in the non-profit sector because they have decided to do something bigger than themselves, to set in motion a turn of events that will solve a problem plaguing society, or to answer a call that they have felt inside of them for some time. Others come to the sector because they are looking for a more flexible schedule, because they have made their money and want to give back, or because they are looking for an entirely new challenge. Like the variety of people looking to join the non-profit world, the sector itself is full of differences.

A Nonprofit Organization (NPO) is dedicated to furthering a particular social cause or advocating for a shared point of view.

Examples of organizations in the voluntary sector include:

  • Charities
  • Foundations
  • Social Welfare Organizations
  • Advocacy Groups
  • Faith-Based Organizations
  • Community Groups
  • Recreational Sports

Activities for the reader(s)

1. Group discussion:

Based on the information given above, discuss in groups the following questions:

  • What is a non-profit organization?
  • Why is the amount of registered non-profit organization increasing?
  • Find 3 example of non-profit organization from your own country and explain what they are doing (goals and activities).

2. Game: Social Circle:

Introduction: This game will help students understand:

  • what Non-profit Sector and Non-profit Organizations (NPO) are,
  • the different kind of services they can provide, as well as
  • the different kind of social issues NPO can address.

Instructions: The trainer must give the definitions of “non-profit sector” and “non-profit organization” and continuously explain to the participants the activity. Firstly, the participants will pick up a social role. The social roles could be according to the following social problems:

  • Anti-social behaviour
  • Poverty
  • Drug abuse
  • Prostitution
  • Alcohol abuse
  • Economic Deprivation
  • Unemployment
  • Sexual abuse
  • Animal abuse
  • Environmental problems or
  • Other relevant issue

When all participants take a social role (e.g. “the poor”), they will create a circle. The trainer will provide some time for understand of the specific roles and after a while, will ask the participants to answer the following questions without exposing their profile:

  1. What does your character look like?
  2. What is your character’s biggest goal?
  3. What are your character’s greatest fears?

When all participants answer the above questions, the they have to split in groups of 2 and they will try to identify what problem the other person is facing and what kind of support each of them will need.  Afterwards, the trainees may change their group and pair with another participant. The role of the trainer is to assure that the focus of the discussions and activities stays mainly in the non-profit sector.

Multiple-choice self-assessment test

Q1. What kind of enterprise you can find in non-profit sector?

a. Social Welfare Organizations
b. Charities
c. Community Groups
d. All above

Q2. Why a non-profit enterprise exists? Please select the incorrect!

a. Feeding the homeless
b. Raise awareness about environmental issues
c. Raise the income of its owner
d. Benefit the general public

Q3. How does a social enterprise work?

a. Selling goods and services in the open market,
b. Reinvest the money they make back into their business or the local community
c. Tackle social problems
d. All above

Q4. How does a social enterprise use its profits?

a. Buying goods and services for its employers
b. Reinvest the money they make back into their business or the local community
c. Give to government
d. Pay taxes

Q5. Who can create a social enterprise?

a. Every day people
b. Rich people
c. Pour people
d. Everyone

Links to self-study resources



A non-profit organization exists to provide a particular service to the community. The word “non-profit” refers to a type of business — one which is organized under rules that forbid the distribution of profits to owners. “Profit” in this context is a relatively technical accounting term, related to but not identical with the notion of a surplus of revenues over expenditures.
Most non-profits businesses are organized into corporations.

Most corporations are formed under the corporations laws of a particular state. Every state has provisions for forming non-profit corporations; some permit other forms, such as unincorporated associations, trusts, etc., which may operate as non-profit businesses on slightly (but sometimes importantly) different terms.