Non-Profit-Making Organisations & Social Enterprises (SQA National 5 Business Management): Revision Note

Non-profit-making organisations

• Non-profit-making organisations belong to the third sector of the economy

• Unlike private businesses, their main purpose is not to make a profit but to support a cause, provide a service or benefit a community

• Any surplus is reinvested back into the organisation rather than paid out to owners or shareholders

1. Charities

• A charity is an organisation set up for a specific cause, such as tackling poverty, funding medical research, or protecting the environment

• Money raised is used in the following ways

  • It goes directly to support the chosen cause

  • It pays for running costs such as staff, premises, or campaigns

How charities raise money

• Donations from the public

• Fundraising events

• Charity shops

• Grants, for example from the National Lottery or government funds

Examples of charities in Scotland

Maggies Provides emotional and social support to people with cancer, as well as their families and friends	CHAS (Children’s Hospices Across Scotland) Provides palliative care for children and families	Scottish SPCA Protects and cares for animals across Scotland

2. Community groups

• Community groups exist to bring people together and provide facilities or services that benefit their members. They are also non-profit-making

Features of community groups

• Run for the benefit of members or the local community

• Surpluses are reinvested to improve facilities or fund future activities

• Often rely on volunteers alongside paid staff

Examples of community groups in Scotland

• Local rugby and football clubs, such as Melrose Rugby Club

• Community arts groups offering music, theatre or dance in towns and villages

• Golf clubs, where membership fees are used to maintain the course and clubhouse

Social enterprises

• Social enterprises exist to make a positive difference to society or the environment, but are run like businesses

  • They earn income by trading goods and services rather than depending only on donations

• The key feature is that most profits are reinvested back into the social or environmental cause, instead of going to owners or shareholders

Features of social enterprises

Examples of social enterprises in Scotland

Street Soccer Scotland Uses football projects to help disadvantaged young people and adults gain confidence and life skills	The Big Issue Scotland Allows homeless or vulnerably housed people to earn an income by selling magazines, giving them a chance to work and build stability