A nonprofit organization is an entity that does not have owners, and which has the purpose of serving society. Under the United States tax laws, a nonprofit entity has tax-exempt status, so that it does not pay income taxes on those of its earnings that relate to its principle mission. If approved by application to the Internal Revenue Service, the contributions made to a nonprofit can be tax deductible. To be classified as a nonprofit, an entity's primary mission must be to support one or more of the following:
- Amateur sports
- Educational activities
- Literary activities
- Prevention of cruelty to animals
- Public safety
Common examples of nonprofit organizations are churches, hospitals and schools.
A nonprofit organization is also known as a not-for-profit organization.