A nonprofit is an organization that exists to serve a public or social purpose rather than to make money for owners or shareholders. Unlike a business that sells products to earn profits for its owners, a nonprofit uses any money it raises to further its mission, whether that's protecting wildlife, running a museum, feeding hungry people, or supporting medical research.

Think of your local animal shelter, public library, or food bank. These are typically nonprofits. They might charge fees or sell items, but that money goes right back into their work. A nonprofit animal shelter uses its funds to care for more animals, not to make someone wealthy.

A nonprofit can bring in more money than it spends, but that extra money must be used for the organization's purpose, not distributed to owners. Many nonprofits rely on donations, volunteers, and grants to operate.

People who work for nonprofits still earn salaries, and the organizations pay rent and bills just like businesses do. The key difference is in the purpose: a nonprofit measures success by the good it does, not by the money it makes. Museums, churches, hospitals, universities, and youth sports leagues are often organized as nonprofits, each working toward goals that benefit communities rather than generating profits for private owners.