What are nonprofit organisations?

Nonprofit organisations - NPOs for short - are private organisations that are not primarily geared to making a profit, but fulfil other purposes. They do this in a wide range of social areas, be it in the social and health sector, in art, culture and leisure, sport, disaster relief, politics, lobbying, environmental protection, etc. In Austria (and many other countries) NPOs do not have their own legal form; they can be associations, foundations, limited liability companies, cooperatives and even (de facto in exceptional cases) public limited companies, provided they meet certain criteria: NPOs are non-governmental, i.e. private organisations which are not allowed to distribute profits or surpluses to owners or members. In principle, therefore, they are allowed to make a profit, but not to distribute it. The use of profits is linked to a specific corporate purpose. 

NPOs are characterised by a certain degree of "voluntariness", for example in the form of volunteer work, memberships or donations. This provides NPOs with special forms of resources which are important from a financial point of view - this is important because NPOs often do not have easy access to certain other forms of funding. 

On the other hand, NPOs achieve various forms of participation with volunteers, members and donations, which are important for communicating their concerns in society. Non-profit organisations fulfil a minimum level of formal organisation and self-administration or decision-making autonomy - this criterion is aimed primarily at distinguishing organisations that have a private-law organisational form but are subject to state institutions. 

In Austria, however, the concept of non-profit status is only enshrined in tax law.

_{Referencing to Meyer, Michael; Simsa, Ruth: NPOs: Abgrenzungen, Definitionen, Forschungszugänge in: Meyer, Michael; Simsa, Ruth, Badelt, Christoph (Hg.): Handbuch der Nonprofit-Organisation, Stuttgart 2013, S. 3-14}

Civil society and its organisations play an important social, political and economic role in democratic countries. They provide (social) services, represent the interests of minorities or of vulnerable groups, exercise a watchdog function vis-à-vis politics and public administration, and contribute to community building by involving diverse people, e.g. through volunteering and membership. The existence of a vibrant civil society is an indicator of well-functioning democracies that give space to the full diversity of different opinions, concerns and solutions. Civil society organisations are often established where a particular social or political concern arises. By combining various public and private resources - such as public funding, private donations, volunteer work and membership fees - they are often a source of social innovation.

The political and social environment shapes the framework conditions for the work of CSOs. The political and legal environment can be shaped to either support or hinder a thriving, engaged and pluralistic civil society. The most important prerequisite for a vibrant civil society is space for the public discussion of different perspectives. Furthermore, the voices of civil society organisations must be taken seriously in the political process: As CSOs have profound expertise in many areas of society, they play a key role in solving a wide range of social and environmental problems.

At the NPO & SE Competence Center, civil society is also a research topic we deal with. Most recently, in 2019, we were commissioned by ERSTE Foundation to conduct a study on the dynamics of civil society in Central and Eastern Europe. It can be found on the ERSTE Foundation website. The study completed in 2014 as part of CIVICUS Civil Society Index focused on the state of civil society in Austria. The study report is available on the website of IGO Interessensvertretung Gemeinnütziger Organisationen.