Non-for-profit is best described as which of the following?

• A. Mission based, receive contributions
• B. Operates to maximize profits for shareholders
• C. Pays corporate taxes on profits
• D. Primarily engages in government contracts

Answer: (A)

Nonprofits are defined by a mission-driven purpose rather than profit distribution. They aim to advance a charitable, educational, or social goal and reinvest any surplus back into that mission instead of paying it out to owners or shareholders. Funding typically comes from contributions and donations, grants, and philanthropic sources. They aren’t in business to maximize profits for shareholders, and they generally don’t pay corporate taxes on income tied to their exempt purpose (though there can be tax rules for income unrelated to that purpose). Government contracts or funding may be involved, but the defining idea is being mission-based and supported by contributions.