Types of
Organizations
Marketing 1
Competency #34
Three Categories of
Organizations
 For Profit
 In business to make profit from operations
 Non-Profit
 In business to fund cause
 Government
 In businesses to finance governments services
Understanding For-Profit and
Non-Profit Organizations
For Profit Organization
 Primary goal is to generate a profit
 Profit is returned to owner(s)
 May be formed to conduct any number of lawful
business activities
 Pays state and federal taxes on profit in
accordance to state, and federal regulations
 Additional taxes paid on property owned
 Assets and property belong to owner(s)
 If business dissolves, company may keep or sell
property
 Raise capital through investors- share of profit
given in exchange for the investment
Non-Profit Organization
 Primary purpose for common cause of community- often religious,
charitable, or educational purposes
 Profits raised MUST be re-circulated back into the organization to fulfill
mission- MAY pay salaries and administrative costs
 Does not pay state and federal tax exemption if qualifies for 501c (3)
exemption
 Assets belong to organization
 If organization dissolves, assets and property must be donated to
another non-profit organization
 Capital raised through donations- donors may receive tax credit
Role of Profit
For
Profit
Income for
Owners
Operate Business
Re-Invest in
Business to
generate MORE
profit for owners
NonProfit
Income for
charitable
cause
Operate
Business
Effects of Competition on For Profit
and Non-Profit Organizations
 BOTH types of organizations compete for limited resources
 BOTH types of organizations promote and market for customers
 BOTH types of organizations must manage business for efficiency,
profit, and positive public image to gain customers and remain
competitive
Class Assignment
 Students will work in small groups (2-3 people per group)
 Select a non-profit of choice to research
 Prepare a PPT presentation summarizing research. Use the outline
handout provided by the marketing teacher.