Non-Profit Organisations and Social Enterprises (AQA A Level Business) : Revision Note

Non-profit organisations

• A non-profit organisation can earn profit (surplus), but any surplus money goes back into the cause

  • They may have employees but often rely on volunteers to provide services

  • They must keep accurate financial records and follow many of the same regulations as businesses

    • E.g. non-profit organisations must pay the National Minimum Wage

• Their overall goal is often focused on helping people, the community or the planet rather than make owners richer

Objectives of non-profit organisations

Examples of non-profit organisations

• Faversham Cricket Club

  • Runs youth and adult cricket teams

  • Membership fees pay for pitch hire, professional services and team kit

• Beamish Museum

  • Preserves North-East industrial heritage

  • Ticket sales support restorations to the site building and facilities

Social enterprises

• A social enterprise is a business that has the primary purpose of creating social or environmental impacts, in addition to generating profits

• Social enterprises can take different forms

  • Cooperatives have a social mission

    • They are owned and controlled by workers or customers

    • Members have the right to elect directors and share profits

  • Mutuals are run for the benefit of members

    • Any profit made is kept inside the organisation to improve services, cut prices or pay member bonuses, instead of being paid out as dividends to investors.

    • Mutuals are common in financial services (e.g. Nationwide Building Society)

Objectives of social enterprises

Advantages and disadvantages of social enterprises

Examples of social enterprises

• Croydon Community Nursery

  • Provides affordable childcare

  • Any surplus goes to fund bursary places for low-income families

• Big Issue Group

  • Gives homeless people an income by selling the Big Issue magazine

  • Also invests in social-enterprise start-ups