A not for profit organization is one that makes money from goods or services, but that money should only cover operating expenses. If any profit is made (because organizations obviously cannot foresee the future) it has to be reinvested back into the organization.. . For instance, the Red Cross Blood Services is a not for profit organization. In essence, the blood they collect is sold to hospitals. They have huge operating costs, and charging the hospitals for blood is how they cover their expenses in hiring staff, buying equipment and supplies, and maintaining vehicles and buildings. The Blood Services does not take donations from the community (unlike the Red Cross Disaster Services). They are not supposed to be profiting from sales of the blood, however. It should just cover their expenses. Sometimes, however, more blood is needed, and the Red Cross may make more than what their actual expenditures were. That money must be reinvested into the organization. It can be used to buy new equipment, remodel old buildings, etc. If it was a commercial enterprise, shareholders, CEOs, and others would basically pocket alot of the profits.. . One main difference between non-profit and not-for-profit is donations. Non-profits usually rely on donors whereas not-for-profits are actually "selling" something. In the Blood Services example, the hospitals are "buying" blood. But in essence, it can be considered a per-bag donation. I don't think, however, a hospital can write the expense off as a charitable donation.